Week in Numbers: Tracking India’s Economic Pulse

India’s private-sector activity strengthened in April, defying concerns over the regional conflict and supply disruptions. The HSBC Flash India Composite PMI rose to 58.3 from 57.0 in March, driven by stronger manufacturing performance, with faster growth in output and new orders.

The HSBC Flash India Manufacturing PMI climbed to 55.9 from 53.9 a month earlier, as firms built buffer stocks to navigate supply-side uncertainties. This led to higher input inventories and finished goods stocks, along with a pick-up in purchasing activity.

 

Manufacturers outpaced service providers in both output and new orders growth. While services activity also improved, the pace of expansion was more modest, with the HSBC Flash India Services PMI inching up to 57.9 from 57.5 in March.

Cost pressures remained elevated, driven by higher fuel and raw material prices, with gas shortages adding to the strain. Although softer than in March, input cost inflation was still the second-steepest in nearly three years. Firms passed on part of these costs, but output price inflation lagged behind input cost increases.

Flash PMI readings have generally overshot final estimates in recent months, with the composite index averaging 0.5 points higher than the final reading over the past year.

Early signs of the West Asia conflict affecting the domestic economy were visible in core sector data.  Output across eight core industries – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity – contracted 0.4% year-on-year in March, reversing a 2.8% expansion in February and marking the weakest performance in 19 months.

The decline was driven by a sharp 24.6% drop in fertiliser output amid shipping disruptions through the Strait of Hormuz. Growth in steel and cement, which had been supporting overall over momentum, slowed significantly. After expanding 9.8% and 9.1%, respectively, in April-February, growth eased to 2.2% and 4.0% in March.

Overall, the core sectors grew 2.6% in 2025-26, the slowest pace since the pandemic-hit 2020-21.

Net foreign direct investment turned positive in February for the first time in seven months, supported by higher gross inflows and lower repatriation. Net inflows were at $4.62 billion, compared with outflows of $1.39 billion in January and $0.70 billion a year earlier.

Gross FDI inflows rose to $8.98 billion from $5.67 billion in January, while repatriation eased to $1.74 billion from $4.92 billion. Overseas investments by Indian firms were at $2.63 billion in February.

For April–February, net FDI rose to $6.27 billion from $1.46 billion a year earlier, while gross flows increased to $88.30 billion from $74.74 billion.

 

The Indian rupee weakened in real effective terms in March, driven by nominal depreciation and relatively lower inflation compared with trading partners. The 40-currency trade-weighted real effective exchange rate index fell to a 12-year low of 92.72 from 93.99 in February. The rupee declined 4.1% against the dollar during the month amid rising crude oil prices linked to the conflict.

Petroleum consumption trends were mixed. Total consumption rose 4.2% year-on-year to 21.57 million tonnes in March, led by a surge in petroleum coke and other products.

In contrast, transport fuel demand weakened despite unchanged retail prices. Petrol and diesel consumption fell 5.4% and 0.8% to 3.32 million tonnes and 8.01 million tonnes, respectively. Liquefied petroleum gas consumption declined 4.3% to 2.61 million tonnes, reflecting supply disruptions linked to the conflict.

 

New business premiums of life insurers rose 23.5% year-on-year to ₹759 billion in March, driven by private insurers. Their premium income grew 32.7% to ₹326 billion, outpacing LIC’s 17.3% growth to ₹433 billion.

For 2025-26, first-year premiums grew 15.7% to ₹4.60 trillion. Growth was broadly balanced, with private insurers expanding 14.9% and LIC 16.7%. In volume terms, LIC retained its lead with 18.46 million policies sold, compared with 9.25 million by private insurers.

 

Overseas direct investment by Indian companies rose 27.5% year-on-year to $7.06 billion in March, led by a surge in guarantees. Guarantees more than tripled to $4.91 billion, while equity investments and loans declined sharply. The largest component was a $2.26 billion guarantee by Tata Motors to TML CV Holdings. 

External commercial borrowings fell to $4.60 billion in February from $5.33 billion in January, though they remained the second-highest in 11 months. The Export-Import Bank of India was the largest borrower a $1 billion loan, followed by Microsoft Corporation (India) at $727 million, Muthoot Finance at $600 million, and Housing and Urban Development Corporation at $446 million.

 

India’s foreign exchange reserves rose to a five-week high of $703.31 billion as of April 17, increasing by $2.36 billion during the week. Foreign currency assets rose by $1.48 billion to $557.46 billion, while gold holdings increased by $790 million to $122.13 billion.

Summer crop area sowing picked up, with total acreage rising 4.4% year-on-year to 6.90 million hectares as of April 17. While rice acreage declined 5.2% to 3.06 million hectares, pulses rose 14.7% to 1.55 million hectares and oilseeds increased 19.5% to 0.91 million hectares.

 

Pre-monsoon rainfall has been normal so far, with cumulative precipitation at 60.1 mm for March 1 to April 24, in line with the long-period average. 

Reservoir storage levels, though declining, remained well above historical norms. As of April 23, storage was at 75.0 billion cubic metres, or 41% of total capacity — 15% higher than a year earlier and 26% above the 10-year average.

 

 

 

Coming up

• Apr 28: Index of Industrial Production for March
• May 1: GST collections for April
• May 4: HSBC India Manufacturing PMI for April

Tailpiece
The government has kept interest rates on small savings schemes unchanged for the ninth consecutive quarter. This has widened the gap between administered interest rates and their formula-based rates by up to 141 basis points for one-year deposits. The divergence could constrain the transmission of policy rate cuts to bank deposit rates, particularly in an easing cycle.