India International Times Latest Business News from India
India’s economic momentum is expected to strengthen in the second half of 2024-25 and continue into 2025-26, according to the latest RBI monthly bulletin. The country remains poised to maintain its status as the fastest-growing major economy, with GDP growth projections of 6.5% (IMF) and 6.7% (World Bank) for 2025-26.
The Union Budget 2025-26 is seen as a balanced approach toward fiscal consolidation and growth, emphasizing capital expenditure and measures to boost household incomes and consumption. The effective capital expenditure-to-GDP ratio is expected to rise to 4.3% in 2025-26 from 4.1% in 2024-25.
Retail inflation eased to a five-month low of 4.3% in January, largely due to declining vegetable prices. Key economic indicators signal a recovery, with improvements in industrial activity, rising tractor sales, increased fuel consumption, and sustained growth in air passenger traffic.
Rural demand remains strong, driven by higher farm incomes, as FMCG sales in rural areas surged 9.9% in Q3 2024-25, compared to 5.7% in Q2. Urban demand also showed improvement, with Q3 growth nearly doubling to 5% from 2.6% in the previous quarter.
Private sector investment intentions remained stable, with project costs sanctioned by banks/financial institutions nearing ₹1 lakh crore in Q3. External commercial borrowings and IPOs for capital expenditure purposes also saw an uptick.
Global uncertainties, including geopolitical tensions and restrictive trade policies, have influenced domestic equity markets, leading to selling pressure from foreign portfolio investors. The Indian rupee, like other emerging market currencies, has depreciated against a strengthening US dollar. However, India’s strong macroeconomic fundamentals and external sector stability have helped it navigate global economic headwinds, the bulletin noted.
