The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit and which gauges business activity in Indian factories but not its utilities, was at 51.3 in April, identical with the March level.
The new orders sub-index, which measures overall demand, slipped in April to 52.5 from 52.7 as demand from abroad waned. The export orders reading held above the 50-mark that separates growth from contraction but suffered its biggest one-month fall in nearly two years.
That pushed the output index down to its lowest level this year, although it remained comfortably above the 50 mark.
"The momentum in the manufacturing sector held broadly steady, with domestic demand countering a slowdown in export orders," said Leif Eskesen, chief economist for India & ASEAN at HSBC.
The survey also showed both input and output prices rose at their slowest pace in about a year. That is likely to provide some respite to policymakers after India's wholesale inflation hit a three-month high in March.