Indian Economic Indicators - Newspaper Summary

 The sources provide a detailed snapshot of Indian economic indicators in October 2025, painting a picture of domestic price stability and resilient growth, set against a backdrop of complex global trade tensions and market uncertainties.

Indian Economic Indicators (October 2025)

1. Price Stability and Inflation Dynamics

A prominent indicator of India’s economic health in this period is the cooling of retail inflation, which hit an over eight-year low.

• Headline Inflation: Consumer Price Inflation (CPI) eased to 1.54% in September, marking the lowest reading since June 2017. This figure slipped below the Reserve Bank of India’s (RBI) lower tolerance limit of the 2-6% target band for the second time in 2025.
• Driving Factors: The cool-off was significantly driven by lower food prices. Food inflation declined to (-)2.28% in September, its fourth straight month of decline. Vegetables witnessed their lowest inflation in four years at (-)21.38%.
• Base Effect: This low headline inflation is largely attributed to a favorable statistical base from the previous year (September 2024 saw a jump in food inflation). The full effect of India’s Goods and Services Tax (GST) cuts, which took effect in late September, is expected to show up in October.
• Core Inflation Concern: Despite the overall low inflation, Core inflation (excluding volatile food and fuel) shot up to a two-year high of 4.43% in September. This surge was fueled by sharp increases in the prices of gold (46.87%) and silver (41.75%) ahead of the festive season.
• Monetary Policy Implications: The average inflation for the July-September quarter was 1.74%, aligning closely with the RBI’s projection of 1.8% for the quarter. Economists suggest that the benign inflation and growth trajectory provides ample room for the RBI to implement 25–50 basis point rate cuts.

2. Economic Growth and Fiscal Indicators

India maintains its status as the world’s fastest-growing large economy, supported by healthy tax collections, though growth faces external risks.

• Growth Outlook: India’s economy grew by 7.8% in the first quarter of FY26. Second-quarter growth is expected at the 7% level, and the RBI has projected a 6.8% growth rate for the entire fiscal year. This growth is primarily fueled by public investment and domestic consumption.
• Direct Tax Collection: Net direct tax receipts in FY26, up to October 12, amounted to ₹11.89 trillion, reflecting a 6.3% year-on-year rise. This represents 47% of the ₹25.2 trillion direct tax collection target for the current financial year. The growth was driven by corporate tax (₹5.02 trillion) and non-corporate tax (₹6.56 trillion) inflows. However, the 6.3% net growth rate is only half the 12.65% increase forecast in the budget, indicating a moderation in collections.

3. Banking, Credit, and Market Health

Market indices were slightly down on October 14, 2025, but foreign capital flow showed renewed interest.

• Stock Markets: The SENSEX closed at 82,327.05, showing a -0.21% change, and the Nifty 50 closed at 25,227.35, a -0.23% decline.
• Capital Flows: Foreign portfolio investors (FPIs) infused ₹3,289 crore into Indian equities over the four trading sessions leading up to the report, becoming net buyers after three months of selling.
• Credit-Deposit Ratio: Provisional data for Q2 (July-September) shows that loan growth once again outpaced deposit growth for Indian banks, reversing the balanced trend seen in Q1. The system-wide Credit-Deposit (CD) ratio rose to 80.3%, crossing the 80% mark for the first time in six months, signaling potential funding challenges for banks and tight liquidity.
• Consumer Credit Risk: Following regulatory action on unsecured personal loans, the year-on-year growth in credit card balance outstanding slowed sharply to approximately 4% as of August 22, down from about 20% a year earlier. However, delinquencies (loans overdue by 90 days or more) have ticked up for credit cards (2.1%) and two-wheeler loans (1.9%) as of June 2025.

Indian Indicators in the Global Economic and Market Context

The stability in India contrasts with the volatile global economic environment characterized by trade wars and geopolitical concerns.

• Global Trade Resilience: Globally, the economy has performed better than initially expected despite US President Donald Trump’s tariffs. The International Monetary Fund (IMF) pegged 2025 global economic growth at 3%, a 20 basis point increase from its April forecast, and major economies have avoided recession. Global merchandise trade volume grew by 4.9% in the first half of 2025, leading the WTO to sharply revise its 2025 trade growth estimate to 2.4%.
• Tariff Headwinds on India: India remains significantly affected by US protectionist measures. The Trump administration imposed an additional 25% tariff on Indian exports beginning August 27, raising the total US tariff on Indian goods to 50%, making it the highest among all US trading partners barring Brazil. This tariff imposition—linked to India’s purchases of Russian oil—is projected to shave off 60 basis points from India’s economic growth.
• Global Instability Driving Safe Havens: Growing global economic uncertainty, renewed US-China trade tensions, and the trend of de-dollarization (driven by political sentiment against the US) are pushing investors toward safe-haven assets. This is reflected in the domestic market where gold futures hit a record high of ₹1,23,977 per 10g on the MCX.
• Reduced Geopolitical Oil Risk: A potential tailwind for India's economy is the geopolitical situation in West Asia. With Gaza visibly headed for peace, global oil prices are expected to follow normal demand and supply dynamics rather than being dictated by geo-politics, thus mitigating the risk of imported inflation via oil tankers. Global oil prices were listed at $64.39.
• Trade Negotiations: India is actively trying to mitigate external risks by accelerating efforts to conclude trade agreements with the European Union and the US. An Indian team is in the US this week (October 2025) to finalize the contours of a bilateral trade agreement (BTA), despite sticking points like India's Russian oil purchases.