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

May 2025

Key highlights include:

• In Mar–Apr’25, high-frequency indicators showed mixed momentum vs. previous month. IIP surged 9% in Mar’25, led by gains in the electricity and manufacturing sector indices. In Apr’25, cement production grew while steel consumption fell vs. Mar'25, driven primarily by a drop in the non-alloy segment amid India's temporary import tariff imposition to protect domestic steel producers. Power consumption witnessed its seasonal uptick in Apr’25. The auto sector weakened industry-wide in Apr'25 vs. Mar'25 as sales declined across most categories amid macroeconomic headwinds.
• India’s merchandise trade deficit widened sharply to $26.4 Bn in Apr'25, driven largely by a steep monthly decline in India's non-petroleum exports including drugs, pharmaceuticals, and electronic goods vs. Mar'25. Though both services exports and imports rose in Apr'25 vs. Mar'25, the trade surplus narrowed to $17.8 Bn as growth in imports outpaced growth in exports. Meanwhile, forex reserves rose on the back of higher foreign-currency assets. FDI inflows were buoyed by a surge in gross equity investments in Mar'25.
• BFSI indicators exhibited mixed performance in Mar-Apr'25. Aggregate deposits and credit remained broadly stable in Mar'25. UPI transaction volumes and values dipped in Apr'25 following multiple technical outages. Life insurance premiums witnessed a cyclical drop, while non-life premiums, driven primarily by health insurance, expanded in Apr'25. Meanwhile, mutual fund assets under management hit record highs in Apr'25, propelled by macro factors including repo rate cuts. NSE and BSE transactions rose, even as India’s volatility index closed 43% higher in Apr'25 amid heightened global market turbulence.
• In Apr'25, macroeconomic indicators signaled easing inflationary pressures. WPI inflation fell to a 13-month low of 0.9%, led by declines in energy and primary article prices, while CPI eased to a near 6-year low of 3.2%. India’s Manufacturing and Services PMIs hit global highs, driven by robust export demand for manufactured goods, rising service sector output, and strong new-business volumes. GST collections climbed to a record high, propelled by robust economic activity and the customary year-end reconciliation. To keep inflation on target while supporting economic growth, RBI cut the repo rate by 25 bps to 6% in Apr’25. Global economic slowdown and policy uncertainty have prompted analysts to cut India’s FY26 GDP growth forecast to 6.2–6.9%.