​Speedbreakers ahead: on India’s economic data

The past fewer days person shown conscionable what a roller coaster of a thrust India’s economical information tin take. Last Friday’s robust Q2 GDP growth, a six-quarter precocious of 8.2%, lifted the government’s temper and brought cheer to its supporters. The comparatively debased nominal maturation complaint and people by the IMF did small to dampen this feeling. However, the latest information connected the Index of Industrial Production (IIP) and, to an extent, the manufacturing PMI are apt to bash much successful that regard. The IIP’s maturation successful October 2025 was conscionable 0.4%, a 14-month low. While the GDP information for the July-September 4th showed the manufacturing assemblage increasing 9.1%, the IIP showed the assemblage had slowed to a 14-month debased of 1.8% successful October. One of the imaginable reasons for this is that the GDP maturation complaint was boosted by a debased base, since the assemblage had grown conscionable 2.2% successful the July-September 2024 quarter. The other, much troubling reason, is the interaction of the U.S.’s tariffs. Merchandise exports grew successful September, the archetypal afloat period of 50% tariffs, arsenic earlier orders were being fulfilled. They past contracted astir 12% successful October arsenic the tariffs began to measurement connected caller bid decisions. The PMI data, too, showed that the people for India’s manufacturing assemblage stood astatine a nine-month debased of 56.6 successful November. The study specifically mentioned that caller export orders roseate astatine their slowest gait successful implicit a year, different motion that the U.S.’s tariffs were hurting.

While subdued exports apt weighed connected the manufacturing sector, the alteration successful upwind towards wintertime and prolonged rains pulled down the energy and mining sectors, respectively. As a result, the superior goods assemblage contracted successful October. The GDP information had shown that concern had grown by a reasonably beardown 7.3% successful Q2. However, the IIP information suggest this could person slowed successful the opening of Q3 with the superior goods assemblage increasing astatine a 14-month debased of 2.4%. The IIP information besides person immoderate concerning quality regarding household consumption. The GDP information showed that Private Final Consumption Expenditure grew astatine astir 8% successful Q2. However, the IIP showed that the user durables and non-durables sectors contracted successful October, successful aggregate their worst show successful 2 years. This was the archetypal afloat period of information pursuing the GST complaint rationalisation. GST gross of ₹1.7 lakh crore successful November, reflecting economical enactment successful October, besides shows that request did not travel rushing successful arsenic accelerated arsenic the authorities would person liked. Taken together, aggregate archetypal metrics are indicating that Q3 is not apt to beryllium a cheerful 4th for the economy.