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India’s economy has remained resilient despite continuing global challenges, supported by strong domestic demand and sustained activity across manufacturing and services, according to the latest Reserve Bank of India bulletin. The bulletin said the recovery in the southwest monsoon during July helped kharif sowing move closer to normal levels, reducing some risks to the agriculture sector. At the same time, the global outlook remains affected by geopolitical tensions in West Asia and new US tariffs. Financial conditions also remained supportive, with strong credit growth, comfortable liquidity and renewed foreign capital inflows.
The Indian economy has continued to show resilience despite global headwinds, with domestic demand remaining strong and manufacturing and services activity maintaining momentum, according to the latest Reserve Bank of India (RBI) bulletin.
An article titled ‘State of the Economy’ in the bulletin said the momentum seen in the first quarter of 2026-27 continued into July, with most high-frequency indicators pointing to sustained activity across manufacturing and services. Merchandise exports and imports also recorded double-digit growth.
The recovery in the southwest monsoon during July helped kharif crop sowing move closer to normal acreage, partly reducing risks to the agriculture sector. However, the global economic outlook continues to face pressure from geopolitical tensions in West Asia and fresh tariffs imposed by the US.
Headline consumer price index (CPI) inflation moved slightly above the target, primarily due to supply-side pressures, the article said. At the same time, stable core inflation indicated that cost pressures were passing through to consumers at a relatively lower rate.
Financial conditions also remained supportive of economic activity. Liquidity conditions eased, helping credit growth and continued investment activity, while foreign capital inflows recovered and provided support to the external sector.
The RBI bulletin noted that financial conditions were marked by strong credit growth, comfortable liquidity and softer yields on government securities, supported by the rebound in capital inflows.
The central bank clarified that the views presented in the ‘State of the Economy’ article are those of its authors and do not represent the official views of the Reserve Bank of India.
Source PTI
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