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:

• High-frequency indicators showed mixed trends in Feb–Mar'26, amid softer industrial momentum and persistent external uncertainty. IIP declined in Feb'26, though steel consumption rebounded sharply and daily average power consumption held broadly stable in Mar'26. The auto sector saw a broad-based recovery in Mar'26, with PVs, 2Ws and tractors rising, while 3W registrations dipped marginally. On the logistics front, e-way bill generation and JNPA traffic posted strong gains in Mar'26, with air freight rising steadily amid high domestic cargo traffic.
• Merchandise trade dynamics improved in Mar'26, with the deficit narrowing to $20.7 Bn as imports declined faster than exports, aided by lower gold and silver imports and stronger petroleum product exports. The services trade surplus held broadly stable at $18.2 Bn, with exports and imports largely unchanged sequentially. Forex reserves declined sharply in Mar'26, driven by falls in foreign currency assets and gold holdings. FDI inflows, however, surged to $7.2 Bn in Feb'26, led by higher gross inflows and reduced repatriations.
• BFSI indicators were mixed in Feb–Mar'26. Aggregate credit and deposit growth continued in Feb'26, while UPI transaction volumes and values hit fresh highs in Mar'26, reflecting strong spending activity and digital adoption. Mutual fund AUM declined in Mar'26, weighed down by debt-scheme outflows and weaker equity valuations. Insurance premiums surged, driven by the non-life health segment. Market activity softened in Mar'26 as NSE and BSE transactions declined and India VIX spiked amid heightened geopolitical tensions and uncertainty.
• On the macro side, GST collections strengthened in Mar'26, supported by higher import-led collections. Fiscal deficit widened in Feb'26 as receipts fell sharply despite rising expenditure. Inflation edged up in Mar'26, with WPI at 3.9% and CPI at 3.4%. The nominal exchange rate weakened in Mar'26, even as the reference rate strengthened. Employment conditions softened, with overall employment and MGNREGA work demand both declining. Economic sentiment moderated, with manufacturing and services PMIs easing and consumer expectations weakening across urban and rural segments. Analysts project FY27 GDP growth of 6.0–7.5%.