The Finance Ministry reported that India economic activity expanded during the second quarter of the current fiscal year. GDP growth reached 7.35 per cent for the period, following a 7.8 per cent increase in the first quarter. Domestic demand and structural reforms remain key drivers for the country’s growth momentum throughout the remainder of the year.
The Ministry noted that recent GST process reforms should reduce compliance burdens and working capital constraints for businesses. Healthy credit growth and new trade agreements are expected to support consumption and exports. Industrial production remains firm, aided by strengthening order flows and improved manufacturing sentiment. The RBI stated that infrastructure development and high capacity utilisation will likely sustain investment activity in the coming months.
However, the report highlighted risks from geopolitical frictions and energy price volatility. Supply-chain pressures and manufacturing costs remain areas of concern. On inflation, the government is using supply-side interventions like stockholding limits and customs duty cuts to manage food prices. External risks include elevated crude oil prices and freight disruptions. The RBI is providing direct dollar liquidity to oil marketing companies to help manage exchange-rate volatility and mitigate imported inflation. Officials stated that sustaining industrial momentum and increasing domestic value addition will be important for future competitiveness.
Based on company and agency reports. For information only; not investment advice.