Week in Numbers: Tracking India’s Economic Pulse 

India’s private-sector activity slowed to its weakest level in over three years in March, as persistent cost pressures and geopolitical risks dampened demand. The HSBC India Composite PMI fell to a 40-month low of 57.0 in March from 58.9 in February.

The India Services PMI declined to a 14-month low of 57.5 from 58.1, though it remained above its long-run average of 54.4. The moderation was driven by slower growth in new business. While services continued to outperform manufacturing, growth eased across both sectors.

Margins came under pressure, with input costs rising at the fastest pace since June 2022, even as output price inflation accelerated to a seven-month high.

Retail automobile sales remained robust, supported by the GST rate cut. Total sales rose 25.3% year-on-year to 2.69 million units in March, with broad-based growth across segments.

Two-wheeler sales increased 28.7% to 1.95 million units, supported by both urban and rural demand. Passenger vehicle sales rose 21.5% to 440,144 units, with rural markets outpacing urban areas. Dealer inventories improved significantly, with stock levels declining to about 28 days from over 50 days a year earlier.

Commercial vehicle sales grew 15.1% to 102,536 units, led by a 25.5% rise in medium commercial vehicles, with 12.0% growth in light commercial vehicles and 18.6% in heavy commercial vehicles.

Electric vehicle penetration continued to rise, though it remained still modest at 9.8% in two-wheelers, 5.1% in passenger vehicles, and 2.4% in commercial vehicles.

For 2025-26, retail automobile sales reached a record 29.67 million units, up 13.3% year-on-year. The improvement in sales momentum followed the government’s GST rate cut in late September, with sales rising 20.6% in the second half of the year, compared with 2.7% growth in the first half.

The Monetary Policy Committee of the Reserve Bank of India projected inflation at 4.6% in 2026-27, up sharply from the 1.9% average recorded in the first 11 months of 2025-26, driven by higher global energy prices amid the West Asia conflict.

The RBI retained its April-June forecast at 4.0% but raised the July-September estimate to 4.4% from 4.2%. Inflation is expected to rise to 5.2% in October-December before easing to 4.7% in January-March. The central bank flagged elevated energy prices and the potential emergence of El Niño conditions as key risks.

GDP growth is projected at 6.9% in 2026-27, lower than the estimated 7.6% in the previous year. The RBI marginally lowered its April-June forecast to 6.8% from 6.9% and cut the July-September projection to 6.7% from 7.0%. Growth is seen at 7.0% in October-December and 7.2% in January-March.

Tractor despatches remained strong, with domestic volumes rising 29.1% year-on-year to 103,193 units in March. The sector has benefited from GST rate cuts, which reduced the tax on tractors with engines of up to 1,800 cc to 5% from 12%. Total sales, including exports, rose 24.0% to 112,468, while production increased 28.6% to 109,967 units. For 2025-26, domestic despatches rose 23.5% to 1.16 million units.

Mutual fund schemes saw record outflows in March, largely due to year-end and quarter-end redemptions from debt funds. Open-ended schemes posted net outflows of ₹2.40 trillion, compared with inflows of ₹942 billion in February.

Debt schemes recorded outflows of ₹2.95 trillion versus inflows of ₹421 billion in the previous month, reflecting typical withdrawals at the end of quarters and financial years to meet obligations, including payment of advance tax.

Equity schemes, however, attracted inflows of ₹405 billion, up from ₹260 billion, despite a sharp market decline. The Nifty 50 fell over 11% in during the month amid global uncertainty.

Gold ETFs saw inflows moderate to ₹23 billion from ₹53 billion, while SIP contributions remained steady at ₹321 billion.

E-way bill generation rose to a record 140.60 million in March, up 12.9% year-on-year, though growth slowed to a five-month low. For 2025-26, total generation increased 19.5% year-on-year to 1.56 billion.

Capacity utilisation in manufacturing rose to 75.6% in October-December from 74.3% in the previous quarter. On a seasonally adjusted basis, utilisation rose to 75.5% from 74.8%, remaining above the long-term average of 73.9%. Despite sustained high utilisation, a broad-based revival in private investment has yet to materialise. RBI Governor Sanjay Malhotra said high capacity utilisation is expected to support a recovery in private capital expenditure.

Urban consumer confidence weakened further in March, reflecting weaker expectations for the economic outlook, employment, and prices. The Current Situation Index fell to 95.7 from 98.1 in January, its lowest level since May 2025, while the Future Expectations Index declined to 120.2 from 123.4, the lowest since July 2023.

Freight traffic at major ports rose 7.1% year-on-year to 915.17 million tonnes in 2025-26, led by double-digit growth in fertiliser and container cargoes. Fertiliser traffic rose 17.6% to 23.53 million tonnes, while container cargo increased 10.1% to 213.01 million tonnes. Crude and petroleum products volume, accounting for about 30% of total traffic, increased 7.2% to 272.95 million tonnes.

Deendayal Port Authority at Kandla handled the highest traffic at 160.11 million tonnes, followed by Paradip Port Authority at 156.45 million tonnes.

Gross direct premiums of general insurers rose 8.8% year-on-year to ₹289 billion in March. For 2025-26, growth was 9.3%, reaching ₹3.362 trillion. Growth in 2025-26 is not strictly comparable with earlier periods because the Insurance Regulatory and Development Authority of India excluded premiums from long-term general insurance policies from its calculations from October 1, 2024.

India’s foreign exchange reserves rose to $697.12 billion as of April 3, primarily reflecting valuation gains from higher gold prices. Total reserves increased by $9.06 billion during the week, with foreign currency assets rising by $1.78 billion to $552.86 billion, while gold holdings jumped by $7.22 billion to $120.74 billion.

Summer crop area increased 0.8% year-on-year to 5.83 million hectares as of April 3. Rice, which accounts for over 40% of the total summer crop area, fell 7.6% to 3.01 million hectares. Pulses rose 25.2% to 0.88 million hectares, while oilseeds increased 4.3% to 0.77 million hectares.

Pre-monsoon rainfall has picked up sharply after a weak start, with cumulative precipitation for March 1-April 10 at 52.7 mm, 27% above the long-period average of 41.5 mm. Reservoir storage levels continued to decline, though they remained well above historical norms. As of April 9, water levels in 166 reservoirs stood at 82.07 billion cubic metres, or 45% of their total live capacity — 18% higher than a year earlier and 27% above the 10-year average. Reservoirs are typically replenished during the southwest monsoon.

Coming up

• Apr 13: Consumer Price Index for March
• Apr 14: Wholesale Price Index for March
• Apr 15: Periodic Labour Force Survey for March    
• Apr 15: Trade data for March 

Tailpiece
The RBI estimates that a 10% increase in crude oil prices from its baseline assumption of $85 per barrel could push inflation up by 50 basis points and reduce economic growth by 15 basis points.