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

Key highlights include:

• High-frequency indicators displayed mixed trends in Sep–Oct’25 post-GST normalization and festive demand. IIP rose marginally in Sep'25, led by growth in the manufacturing sector and stronger capital and consumer goods output. In Oct'25, steel consumption inched up amid a rise in use of non-alloy steel. Power consumption slowed due to unseasonal rains and lower use of cooling appliances. The auto sector witnessed growth across all sectors fueled by festive offers and spending post GST rationalization in Oct'25. PV, 2W and tractor sales reached all-time highs alongside a strong growth in 3W registrations.
• On the trade front, the merchandise trade deficit expanded to an all-time high of $41.7 billion in Oct'25, driven by a spike in gold & silver imports while exports in jewelry, chemicals & engineering goods declined. The services trade surplus further widened to $19.9 billion in Oct’25, as export volumes outpaced imports. Meanwhile, foreign-exchange reserves fell in Oct’25, mainly due to declines in foreign currency assets and gold reserves. FDI inflows inched up slightly in Sep'25 driven by equity inflows.
• BFSI indicators also reflected varying trends in Oct’25. While aggregate deposits stagnated, aggregate credit inched up slightly in Sep'25. UPI transactions rose with transactions surging to new highs in Oct'25 owing to festive spending. Insurance premiums dipped as life insurance premiums fell sharply. Mutual fund AUM reached a new high, driven by debt and flexi-cap equity funds. However, BSE & NSE transactions slowed. VIX closed Oct’25 at a higher level, amid global economic uncertainties.
• On the macroeconomic front, WPI inflation declined sharply to a 27-month low of -1.2% in Oct'25, due to a reduction in prices of food, crude petroleum & natural gas, mineral oils and electricity. CPI inflation eased further in Oct'25 to 0.25% – the lowest reading in the current series (since 2012) – driven by food and beverage deflation, the full-month impact of the GST cut, and a favourable base effect. Manufacturing PMI inched up in Oct'25 driven by improved technology investment, efficiency, and new clients. However, services PMI slowed as heightened competition and heavy monsoons weighed on expansion. On the fiscal front, India recorded a surplus in Sep’25, as tax revenue witnessed a cyclical jump. GST collections rose in Oct'25, driven by sustained festive spending and domestic trade. Overall employment rate declined in Oct'25, attributing to a sharp fall in rural non-agriculture jobs. Analysts project FY26 GDP growth at 6.5–6.8%.