Week in Numbers: Tracking India’s Economic Pulse

Growth in India's private sector economy rebounded in January after losing momentum towards the end of calendar 2025. HSBC Flash PMI data showed faster growth in new orders and output, a return to job creation, and a rebound in business confidence across manufacturing and services. The HSBC Flash India Composite PMI rose to 59.5 in January from an 11-month low of 57.8 in December, indicating a strong rate of expansion above the long-run average.

The Manufacturing PMI increased to 56.8 in January from a two-year low of 55.0 in December, signalling the strongest improvement in operating conditions since October, while the Services PMI rose to 59.3 from 58.0. Flash PMI readings, however, should be interpreted with caution, as they have tended to overestimate final PMI readings in recent months.

 

Performance of infrastructure industries improved in December, though overall growth remained weak. Output growth in the eight core industries rose to a four-month high of 3.7% in December from 2.1% in November, led by robust growth in cement and steel. Output of crude oil, natural gas, and refinery products contracted year-on-year in December, as in November. Cement output rose 13.5% year-on-year in December, while steel production increased 6.9%.

Construction-related sectors such as cement and steel have supported overall core sector growth in recent months. Cement and steel output grew 8.8% and 9.5%, respectively, during April–December, compared with overall core sector growth of 2.6% in the period.

The improvement in core industries is likely to lift industrial growth in December. The eight core industries – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity – together account for 40.3% of the weight in the Index of Industrial Production.

 

The consolidated gross fiscal deficit of state governments increased to 3.3% of GDP in 2024-25 after remaining below 3.0% in the previous three years. The rise was mainly due to lower revenue receipts and higher capital expenditure, including spending funded by the Centre’s 50-year interest-free loans to states that are over and above their normal net borrowing limits. For 2025–26, states have budgeted a gross fiscal deficit of 3.3% of GDP while aiming to improve the quality of spending by restraining revenue expenditure. The Centre has prescribed a fiscal deficit ceiling of 3.5% for states, including 0.5% linked to power sector reforms.

The consolidated outstanding liabilities of states declined to 28.1% of GDP at the end of March 2024 from a peak of 31.0% at the end of March 2021, reflecting fiscal consolidation and favourable debt dynamics. Outstanding liabilities are budgeted to rise to 29.2% of GDP by end-March 2026.

Net foreign direct investment was negative for the third consecutive month in November, largely due to elevated repatriation by foreign investors. There was a net FDI outflow of $446 million in November, compared with $1.67 billion in October, as repatriation rose to $5.34 billion from $5.00 billion. Outward FDI of $1.51 billion in November also weighed on the overall balance. Gross FDI inflows eased marginally to $6.41 billion in November from $6.54 billion in October.

Net FDI during April–November, however, remained positive at $5.63 billion, compared with $781 million a year earlier. Gross FDI inflows during the eight-month period rose to $27.73 billion from $17.16 billion a year earlier.

  The Indian rupee depreciated in real effective terms in December, reflecting nominal depreciation against major currencies. The 40-currency trade-weighted real effective exchange rate index fell to 95.30 in December from 97.52 in November. The rupee depreciated 0.5% against the US dollar during the month, pressured by foreign portfolio outflows and uncertainty surrounding India-US trade deal.

 

External commercial borrowings by Indian companies rose to $2.40 billion in November from $2.21 billion in October, though they remained below the $2.83 billion recorded a year earlier. ONGC Videsh was the largest borrower during the month with a $500 million loan, followed by Hindustan Petroleum Corporation at $450 million, InterGlobe Aviation at $159 million, Clean Max Tasman at $125 million, and Aditya Birla Capital at $100 million.

 

 

India’s foreign exchange reserves rose by $14.17 billion week-on-week to $701.36 billion as of January 16, driven by a dollar-rupee buy-sell swap and valuation gains in gold. This marked the highest weekly increase in over 10 months. The Reserve Bank of India conducted a $10 billion dollar-rupee swap auction on January 13. Foreign currency assets increased by $9.65 billion to $560.52 billion, while gold reserves rose by $4.62 billion to $117.45 billion. Overall, reserves have risen by $33.03 billion so far this fiscal year due to higher gold prices.

   

Outstanding NRI deposits fell slightly to $167.97 billion at the end of November from $168.23 billion a month ago. Deposits in non-resident (external) rupee accounts down nearly $500 million to $100.50 billion as on November 30. While, outstanding foreign currency non-resident (banks) deposits rose nearly $270 million to $34.67 billion.

 

 

Annual inflation based on CPI for Agricultural Labourers rose to 0.04% in December from -0.66% a month earlier, mainly due to a low base effect. CPI inflation for Rural Labourers increased to 0.11% from -0.47% over the same period.

   

 

Consumption of petroleum products rose 2.8% year-on-year to 21.75 million tonnes in December, driven by higher demand for high-speed diesel and petrol. Diesel consumption climbed 6.2% to 8.46 million tonnes, while petrol consumption increased 5.9% to 3.56 million tonnes. Liquefied petroleum gas consumption rose 3.3% to 3.08 million tonnes, while petroleum coke demand contracted 10.8% to 1.88 million tonnes.

 

 

Winter rainfall has remained patchy so far. The country received a cumulative rainfall of 4.4 mm during January 1-23, 63% below the long-period average of 11.9 mm for the period.

 

Reservoir storage levels remained comfortably above historical averages, reflecting strong monsoon and post-monsoon rainfall. As of January 22, water levels in 166 reservoirs stood at 130.75 billion cubic metres, or 71% of their total live capacity. This was 7% higher than a year earlier and 24% above the 10-year average.

 

With the sowing season nearing completion, the area under rabi crops stood at 65.23 million hectares as of January 16, up 3.3% from a year earlier. Sowing has exceeded the normal area, covering 102.3% of the normal area. Wheat acreage rose by 1.9% to 33.42 million hectares, while the area under pulses and oilseeds increased 2.9% to 13.70 million hectares and 3.8% to 9.69 million hectares, respectively, pointing to a broadly favourable rabi outlook.

 

Coming up:

• Jan 28 – Index of Industrial Production for December
• Jan 30 – Government finances for April–December
• Feb 1 – GST collections for January 

Tailpiece
India has a population of over 1.4 billion people and a median age of about 28 years. However, there are wide interstate differences, with the median age ranging from around 23 years in Bihar to around 37 years in Kerala.