India Economic Monitor

BCG’s India Economic Monitor shares insights on the state of Indian Economy from the most recent month, capturing 30+ key macroeconomic indicators and comparing them with trends observed in recent months. These indicators include industrial activity, trade, financial services, economic sentiments and sector-wise trends.

Brief Summary for Latest Report

April 2025

Key highlights include:

• In Feb-Mar'25, high-frequency indicators exhibited mixed trends vs. the previous month. IIP declined sharply to a 3-month low in Feb'25, with mining, manufacturing and electricity sector indices contracting. While power and steel consumption rose, cement production fell in Feb-Mar'25. The auto sector recorded growth in Mar'25, recovering from the decline seen in Feb'25, with gains across all segments. Tractor sales saw a notable rise, supported by favorable agricultural conditions. PV and 2W sales benefited from promotional discounts, new model launches, and festive-season demand.
• In the trade segment, India’s merchandise trade deficit widened to $22 bn in Mar'25, driven by a sharp rise in oil and gold imports. Oil imports surged to $19 bn, the highest since May'24, while gold imports nearly doubled from the previous month. In Mar'25, the services trade surplus remained steady at $18 billion, as imports and exports declined by similar amounts. Foreign exchange reserves rose primarily driven by increased gold reserves. FDI inflows declined in Feb'25 amid lower equity investment and higher repatriation.
• BFSI indicators exhibited mixed trends in Feb-Mar'25. Aggregate deposits and credit touched record highs in Feb'25, while UPI transaction volume and value surged to all time high in Mar'25. Insurance premiums registered a cyclical surge of 71% reaching ₹89k Cr in Mar'25, driven by life insurance premiums. NSE and BSE transactions rose by 2.5% in Mar'25, recovering from the 15-month and 18-month lows seen in Feb'25. Meanwhile, India VIX declined 9% over the month, indicating softer market volatility expectations for Apr'25.
• Macroeconomic indicators signaled easing inflationary pressures in Mar'25. Wholesale Price Index (WPI) inflation moderated to 2.1%, driven by a slower rise in primary article prices. Consumer Price Index (CPI) inflation declined to a near 6-year low of 3.3%, largely due to a sharp deceleration in food and beverage price increases. The Manufacturing Purchasing Managers’ Index (PMI) climbed to an 8-month high, reflecting robust sales and output, while the Services PMI registered a slight dip. GST collections rose, supported by increased revenue from imports. The Reserve Bank of India held its repo rate steady at 6.25%. Leading analysts project GDP growth for FY26 in the range of 6.3-7.0%.