Business activity in India surges to 8-month high on the back of strong manufacturing

India's business activity this fiscal expanded at the fastest rate in eight months in March, staying on course as the fastest growing major economy.

HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 61.3 this month from February's final reading of 60.6.

That extended the streak of expanding activity to 32 months. The 50-mark separates expansion from contraction on a monthly basis.

"Led by the strongest manufacturing output in nearly three-and-a-half years, the composite output index rose quickly," said Pranjul Bhandari, chief India economist at HSBC. "New orders rose at a faster pace than in the previous month, and within that both domestic and export orders showed improved vigor."

Growth was led by the manufacturing sector, which has been one of the primary economic drivers over the past few quarters. The index tracking factory activity rose to 59.2, its highest since February 2008, from 56.9 last month.

Demand in Asia's third-largest economy for factory goods remained strong with new orders recording the fastest expansion in over three years.

Meanwhile, services activity also remained robust although the index eased slightly to 60.3 in March from 60.6 last month.