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

GDP & National Income Aggregates:

• In Oct–Dec’25, India’s real GDP growth accelerated to 7.8% YoY under the revised 2022–23 base-year series, marking one of the strongest readings in recent quarters.
• Services and industry remained the key growth drivers: services grew 9.5% YoY, supported by financial, real estate and professional services, while industry expanded 9.7% YoY, buoyed by strong manufacturing activity. Agriculture remained subdued at 1.4% YoY.
• On the demand side, private consumption and gross capital formation continued to support domestic demand, growing by 8.7% and 7.8% YoY, respectively, while government consumption moderated cyclically to 4.8% YoY.

High Frequency Indicators:

• High-frequency indicators remained broadly stable in Jan-Feb’26. Industrial activity stayed resilient in Jan’26 on strong underlying indicators, while in Feb’26, average daily power consumption inched up even as steel consumption declined. In logistics, e-way bill generation fell further in Feb’26, partly due to the shorter month, while JNPA container traffic also moderated. Air passenger traffic dipped in Feb’26, although air freight remained resilient. Auto sales softened cyclically across most categories in Feb’26, while 3W registrations remained broadly flat.
• In the external sector, the merchandise trade deficit narrowed to $27.1 Bn in Feb’26, driven by lower gold and silver imports, while the services trade surplus narrowed to $23.2 Bn. Forex reserves increased further in Feb’26, supported by higher foreign currency assets. FDI declined sharply, driven by weaker equity inflows, particularly via the RBI route and share purchases despite some moderation in outflows.
• BFSI indicators showed mixed trends in Jan–Feb’26. Credit growth strengthened in Jan’26, driven primarily by higher loans, cash credits, and overdrafts. Mutual fund AUM also increased in Feb’26, supported by continued net inflows into equity funds. UPI transactions declined in Feb’26 due to the shorter month, despite record-high daily average volumes. Insurance premiums softened, reflecting moderation in the non-life segment, especially crop insurance. Meanwhile, market activity remained firm as NSE and BSE transactions edged up, while India VIX closed at a 9-month high amid heightened global volatility.
• On the macro side, GST collections declined in Feb’26 due to the shorter calendar month, alongside weaker import revenue, despite steady domestic activity. In Jan’26, the fiscal deficit widened as tax revenues declined. Inflation firmed further in Feb’26, with WPI rising to 2.1% on higher manufactured-product and non-food article prices, and CPI increasing to 3.2%, led by food and personal care. Manufacturing PMI strengthened in Feb’26 on stronger domestic demand and output, even as services PMI edged down slightly. Analysts project FY26 GDP growth in the range of 5.9–7.6% amid volatile external conditions, with the Government of India’s second advance estimate placing growth at 7.6%.