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India manufacturing hit by higher interest rates

28 January 2014 Last updated at 00:28 GMT

India's manufacturing sector - a key driver of the economy - has slowed over the last two years, dragged down by higher interest rates.

Critics say this has hurt domestic demand because it is harder for businesses and customers to borrow money.

But others say central bankers needed to raise interest rates to rein in inflation.

The BBC's Puneet Pal Singh reports on the challenges to India's economic prosperity.