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

• High-frequency indicators exhibited mixed momentum amid global headwinds and trade uncertainty in Nov-Dec’25. IIP rebounded in Nov’25 led by manufacturing and mining after a subdued festive period. Cement production continued to inch up to a 5-month high in Nov'25, while steel consumption rose sharply to a 9-month high in Dec’25. Daily average power consumption also increased in Dec’25, driven by increased heating demand amid colder winters. In the logistics domain, e-way bill generation and JNPA container traffic scaled record highs in Dec’25, reflecting strong year-end activity. Air passenger bookings and air freight traffic grew in Nov’25 on the back of resilient domestic demand. In contrast, the auto sector slowed in Dec’25, with volumes declining seasonally across most categories.
• In the trade segment, the merchandise trade deficit widened to $25.1 Bn in Dec’25, driven by higher imports of electronic goods, ore and metal scraps despite a pickup in petroleum product exports. The services trade surplus expanded to $18.1 Bn in Dec’25 amid sustained demand for IT and other professional services. Forex reserves inched up in Dec’25, led by a rise in gold and foreign-currency assets. FDI inflows declined further in Nov’25, as repatriations/disinvestments outpaced fresh investment inflows.
• BFSI indicators showed divergent trends in Nov-Dec’25. Aggregate deposits and credit continued to expand in Nov’25, supported by steady deposit mobilization and lending momentum. UPI transaction volumes and values scaled record highs in Dec’25 amid festive and year-end spending. Mutual fund AUM inched up further on continued inflows into equity, hybrid, and ETF schemes. Insurance premiums surged in Dec’25, led by strong growth in life insurance. NSE transactions edged up in Dec’25, while BSE activity softened. India VIX declined sharply, indicating subdued volatility expectations.
• On the macro side, WPI inflation turned positive in Dec’25 at 0.83%, driven by higher food, non-food articles, and manufactured products, while CPI inflation edged up to 1.33% on increased metal prices. Manufacturing PMI slipped to a 2-year low amid slower new orders, output, and employment. Services PMI eased to an 11-month low even as export demand remained resilient. GST collections grew marginally to ₹1.79 Tn, supported by steady domestic activity and higher import revenues. The rupee weakened to a monthly average of ₹90.1 per USD in Dec'25; however, the real effective exchange rate (REER) remained broadly stable, supported by steady exports and relatively low inflation. The RBI cut the repo rate by 25 bps in Dec'25 to support growth amid easing inflation. FY26 GDP growth is projected at 6.5–7.5%.