Amid global uncertainties, India remains among the fastest growing major economies across the globe and has been able to sustain the momentum in economic activities through June, and both industrial and services sector indicators remained firm in India, according to the Reserve Bank of India (RBI)
The farm sector is witnessing uneven southwest monsoon, but the impact on food inflation may be mitigated by comfortable foodgrain stocks.
“The momentum of external trade sustained as reflected in high growth in exports and imports in Q1 2026-27. This is likely to be strengthened by the recent operationalisation of the India-UK Comprehensive Economic and Trade Agreement and progress in other bilateral trade agreements,” according to the Central Bank’s July bulletin.
External vulnerability indicators also remained sound. Recovery of foreign investments in recent months shows a revival of confidence in the economy, it noted.
The global economy is dealing with uncertain economic environment, supply chain disruptions, and fragmented trading relationships.
However, the domestic economy has navigated the external uncertainties well, underpinned by healthy demand conditions and resilient performance of the industrial and services sector.
“Headline retail inflation inched up in June while core inflation, especially excluding precious metals remained low. Liquidity conditions improved further, supporting the ongoing robust credit growth. India’s external sector remains steady with improving outlook, aided by inflows of foreign investments,” said the RBI bulletin.
The gross and net foreign direct investment (FDI) were higher in April-May 2026 than the previous year. Net foreign portfolio investment (FPI) flows turned positive in June and maintained positive flows in July amid policy support and easing geopolitical tensions.
“The Indian equity markets gained in June. However, following the cessation of the ceasefire in early July, equity markets remained range bound,” said the RBI, adding that India’s key external sector vulnerability indicators remained well-anchored as at end-March 2026.
