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India factory output slumps to seven-month low

Commuters travel past a Reserve Bank of India (RBI) building in Kolkata in this November 11, 2014.

[MUMBAI] India's factory output slumped to a seven-month low in September on weak demand, a survey showed Thursday, adding weight to the central bank's view that the country's economic recovery was fragile.

Japanese media group Nikkei said its Purchasing Managers' Index fell to 51.2 points last month from 52.3 in August. It had touched a six-month high in July.

A reading of more than 50 points suggests industrial expansion while anything below indicates contraction, according to the survey, which is a key barometer of economic health.

"Growth of Indian manufacturing production in September was weighed down by a difficult economic climate," said Pollyanna De Lima, an economist at Markit, which compiles the survey.

The report came two days after the Reserve Bank of India slashed 50 basis points off interest rates in a bid to boost investment and demand.

Central bank Governor Raghuram Rajan said a "tentative" economic recovery was underway in India, but that it was "far from robust".

Prime Minister Narendra Modi has made reviving Asia's third-largest economy a priority since coming to power last May.

After a promising start, economic growth slowed to seven percent in the first quarter of the current financial year, matching China and outpacing most major economies, but down from 7.5 per cent in the previous quarter.