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India's manufacturing sector output declined on a sequential basis in June, as the second wave of Covid-19 impacted demand.

The PMI ranges between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month.

Accordingly, the headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) fell to 48.1 (index reading) in June as against a reading of 50.8 in May.

Accordingly, the latest reading pointed to a renewed deterioration in the health of the sector that was, however, moderate.

The PMI had averaged 51.5 in the opening quarter of fiscal year 2021-22, the lowest three-month figure since the same period one year ago.

"India's manufacturing industry fell back into decline during June, as the intensification of the pandemic and strict containment measures negatively impacted on demand," IHS Markit's June PMI report said.

"The latest results highlighted renewed contractions in factory orders, production, exports and quantities of purchases. With business optimism fading over the month, job shedding continued."

According to the report, the stretch of new order growth that started in August 2020 came to an end in June, with firms linking the deterioration in demand to the pandemic.

"Despite being solid, the pace of contraction was much softer than those registered at the onset of Covid-19 last year."

"Covid-19 restrictions also curtailed international demand for Indian goods. New export orders decreased for the first time in ten months, albeit modestly."