Week in Numbers: Tracking India’s Economic Pulse

India’s industrial growth slowed to a five-month low of 4.1% in March from 5.1% a month earlier. Despite the slowdown, growth remained comfortably above consensus estimates. Many had expected industrial growth to slow sharply due to a contraction in the output of the eight core industries, which account for 40.3% of the Index of Industrial Production. India’s manufacturing PMI also slowed to 53.9 in March from 56.9 a month earlier.

Sequentially, factory output grew 9.1% in March, broadly in line with historical trends for the month.

The slowdown was primarily driven by a deceleration in electricity generation, which eased to 0.8% in March from 2.3% a month earlier. However, the sector’s growth contrasted with a 0.5% contraction in electricity output among the eight core sectors.

The data suggest that the impact of the war in West Asia on the industrial sector has remained marginal so far. The better-than-expected growth was driven by machinery and equipment, motor vehicles and trailers, and other transport equipment, which saw strong growth in March.

Industrial output rose 4.1% in 2025-26, marginally higher than 4.0% in the previous year.

This is the last IIP release based on the 2011-12 series. The National Statistics Office will release a new series with 2022-23 as the base year on June 1.

Going forward, disruptions in the supply of crude oil, liquefied natural gas, and fertilisers, along with rising input costs due to the war, are likely to put downward pressure on growth. The uncertainty surrounding the southwest monsoon will add to this pressure.

 

 

Goods and services tax collections rose to a record ₹2.43 trillion in April, though growth was only 2.5% year-on-year. Net GST collections, after refunds, increased 0.7% to ₹2.11 trillion. The year-on-year comparison is skewed as last year’s collections included cess. The government has phased out GST cess by partly merging it with other GST rates and shifting part of it to excise duty. On a comparable basis, excluding cess, GST collections rose 8.7% year-on-year in April.

 

Domestic air passenger traffic contracted 0.9% year-on-year to 14.42 million in March. The contraction, the first in three months, was due to disruptions to air traffic caused by the war in West Asia and a sharp increase in fares following a rise in crude oil prices. IndiGo, which accounts for 63.3% of the domestic market share, carried 9.12 million passengers in March, down 2.0% from a year ago.

India’s domestic passenger traffic rose 1.3% to 167.48 million in 2025-26.

 

Renewable energy generation, including large hydroelectric projects, rose 10.8% year-on-year to 36.47 billion units in March, driven by a 15.3% jump in solar energy output to 19.39 billion units. Wind generation increased 6.2% to 5.45 billion units, while output from large hydro projects rose 8.4% to 9.50 billion units. Total electricity generation in March, including thermal and nuclear sources, increased 0.8% year-on-year to 161.70 billion units. Renewables accounted for 22.6% of total generation in March, up from 20.5% a year earlier.

In 2025-26, renewable energy generation rose 21.8% to 310.59 billion units, while total electricity generation increased 1.0% to 1,847.94 billion units.

Bank lending rates eased marginally for the second consecutive month in March. The weighted average lending rate on fresh rupee loans declined by 4 basis points to 8.40%, while rates on new term deposits rose 42 basis points to 6.07%. Since the start of the monetary easing cycle in February 2025, lending rates on fresh loans have declined by 93 basis points, compared with a cumulative 125-basis-point reduction in the policy repo rate. However, deposit rates have fallen by only 55 basis points during the same period, partly because the government has kept interest rates on small savings schemes unchanged. Higher administered interest rates have limited banks’ ability to reduce interest rates without causing a diversion of deposits.

 

Non-food bank credit growth remained strong, rising at 15.9% as of March 31 compared with 14.3% a month ago. Credit to industry accelerated to 15.0% from 13.5% in the previous month, while credit to services jumped 19.0% from 16.3%, and agriculture increased to 15.7% from 12.3%.

India’s services trade surplus widened to $21.00 billion in March from $17.84 billion in February, driven by a rise in exports. Services exports rose 7.2% year-on-year to $38.21 billion in March, while imports contracted 1.6% to $17.21 billion. India’s services trade surplus touched $216.68 billion in 2025-26, up 14.8% from $188.80 billion. India’s merchandise trade deficit was at $333.19 billion in 2025-26, up 17.5% from $283.50 billion.

Annual inflation based on CPI for Industrial Workers rose to a 17-month high of 4.27% in March from 3.99% in the previous month, primarily on account of a 3.3% month-on-month increase in fuel and light. Oil marketing companies raised cooking gas prices in March, though they kept retail prices of normal petrol and diesel unchanged.

 

India’s foreign exchange reserves fell to a three-week low of $698.49 billion as of April 24, declining by $4.82 billion during the week. Foreign currency assets fell by $2.84 billion to $554.62 billion, while gold holdings declined by $1.90 billion to $120.24 billion. The reserves fell primarily due to lower gold prices and the Reserve Bank of India’s dollar sales in the foreign exchange market to curb the rupee’s sharp fall against the dollar. The rupee depreciated 1.4% against the US dollar in the week to April 24 as the war in West Asia showed no signs of easing.

 

 

Area under summer crops picked up, with total acreage rising 3.0% year-on-year to 7.23 million hectares as of April 24. While rice acreage declined by 5.0% to 3.07 million hectares, pulses rose by 7.9% to 1.72 million hectares, and oilseeds increased by 19.5% to 0.92 million hectares.

Pre-monsoon rainfall has been normal so far, with cumulative precipitation at 72.3 mm for March 1 to May 1, 2% above the long-period average of 70.9 mm. 

Reservoir storage levels, though declining, remained well above historical norms. As of April 30, storage was at 71.08 billion cubic metres, or 39% of total capacity — 14% higher than a year earlier and 27% above the 10-year average.

 

Coming up

• May 4: HSBC India Manufacturing PMI for April
• May 6: HSBC India Services, Composite PMI for April
• May 12: Consumer Price Index for April 

Tailpiece
Arunachal Pradesh recorded the higher highest sex ratio in India in 2023, at 1,085, followed by Nagaland at 1,007. Jharkhand recorded the lowest sex ratio in the country at 899, followed by Bihar at 900.

More than three years after their withdrawal, ₹2,000 notes worth ₹54.51 billion continue to circulate. The total value of ₹2,000 notes in circulation on May 19, 2023, when the withdrawal of notes was announced, was ₹3.56 trillion. In the last year, ₹2,000 notes worth ₹8.15 billion were returned to the Reserve Bank of India. Although withdrawn, the ₹2,000 notes remain legal tender.