Is the Indian economy gaining momentum despite global challenges?
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Synopsis
The Indian economy is showing promising signs of growth, even as global challenges persist. With robust manufacturing and services activity propelled by festive demand and GST reforms, experts remain optimistic about India's economic resilience.
Key Takeaways
- Strong growth in manufacturing and services sectors.
- Low inflation driven by food price reductions.
- Increased GST collections indicating consumer demand.
- Widening merchandise trade deficit due to global challenges.
- Strong foreign exchange reserves to cushion against shocks.
Mumbai, Nov 24 (NationPress) The Indian economy is witnessing a notable increase in momentum, despite persistent global challenges. High-frequency indicators for October point to a strong surge in both manufacturing and services sectors, bolstered by festive demand and the ongoing benefits of GST reforms, as highlighted in the RBI monthly bulletin released on Monday.
Inflation has decreased to a historic low, remaining well below the target rate. This decline is largely attributed to falling food prices, the reduction in GST rates applied to goods and services, and favorable base effects. Financial conditions have been favorable, with a significant increase in financial resources flowing to the commercial sector compared to the previous year, according to the bulletin.
GST collections have improved compared to the previous month, reflecting a robust increase in consumer demand. The sowing of rabi crops is progressing well following the harvest of kharif crops.
High-frequency indicators for October indicate a further broadening of manufacturing activity alongside a continued strong expansion in the services sector. Merchandise trade deficit reached an unprecedented high in October 2025.
While exports contracted after three months of growth due to global challenges, imports surged, driven by increased gold and silver imports to meet festive demand, as per the RBI bulletin.
To alleviate the impact of trade disruptions on exports caused by global challenges, the Reserve Bank has implemented various immediate trade relief measures for exporters.
Tariff exemptions on certain agricultural products by the US on November 14, 2025, are expected to support Indian exports, as noted in the report.
The RBI bulletin also indicates that Indian equity markets have gained ground in October-November amidst positive signals regarding the India-US trade deal and strong corporate earnings for Q2:2025-26.
Primary market mobilization showed a significant increase in October compared to the previous month. The initial public offerings (IPOs) mobilization during April-October 2025 was considerably higher than the previous year, with strong participation from both FPIs and DIIs.
Despite ongoing uncertainty in global trade policies and concerns regarding their domestic implications, the Indian economy continues to exhibit resilience against external shocks, supported by strong services exports, robust remittance inflows, and stable oil prices.
Foreign exchange reserves remain sufficient to buffer against adverse external shocks. The external debt-to-GDP ratio remains low and stable, along with a low share of short-term debt in the total external debt, as added by the RBI bulletin.
Point of View
This report highlights the Indian economy's adaptability amid global disruptions. The resilience shown is commendable, with strong indicators in manufacturing and services, suggesting that India is well-positioned to weather external challenges.
NationPress
24/11/2025
Frequently Asked Questions
What factors are contributing to the growth of the Indian economy?
The growth of the Indian economy is attributed to increased manufacturing and services activities, festive demand, and positive impacts from GST reforms.
How has inflation affected the economy?
Inflation has moderated to historic lows, primarily driven by declining food prices and GST rate cuts, benefiting overall economic conditions.
What is the current status of India's trade deficit?
The merchandise trade deficit has widened to an all-time high in October 2025, mainly due to a contraction in exports and increased imports.
What measures has the Reserve Bank taken to support exporters?
The Reserve Bank has implemented various trade relief measures to assist exporters in light of disruptions caused by global challenges.
How are foreign exchange reserves impacting the economy?
Foreign exchange reserves remain adequate to cushion against external shocks, contributing to overall economic stability.
