India’s Growth Pulse: Tracking India’s Economic Momentum
October 2025
5th Issue
15 min read
Executive Summary
The October 2025 edition of India’s Growth Pulse reviews India’s economic momentum through September 2025 and presents a picture of confident macroeconomic stability. A strong Q1 GDP performance, benign inflation and a supportive monetary policy environment allowed the RBI to hold rates while upgrading growth expectations and sharply lowering the inflation forecast. The report also highlights sustained GST collections, improving labour force participation, green energy momentum and major policy initiatives such as the National Pulses Mission and a renewed Blue Economy strategy. However, it also notes emerging pressure points, including moderated industrial output, divergent consumer demand and a widening trade deficit.
Key Developments
- The RBI Monetary Policy Committee kept the repo rate unchanged at 5.50% and maintained a neutral stance.
- The RBI upgraded its FY26 GDP growth forecast to 6.8% and reduced its CPI inflation projection to 2.6%.
- Real GDP grew 7.8% in Q1 FY26, led by services, manufacturing and a 7.8% rise in Gross Fixed Capital Formation.
- Retail CPI inflation moderated to 1.85% in September, aided by food-price deflation, while WPI inflation fell to 0.13%.
- Gross GST collections remained strong at ₹1.89 lakh crore in September, reflecting 9.1% year-on-year growth.
- Industrial output moderated, with IIP growing 4.0% and the Index of Core Industries growing 3.0%.
- Labour market indicators improved, with the overall LFPR reaching a five-month high of 55.3% and female LFPR rising to 34.1%.
- The overall trade deficit widened to $16.61 billion due to import growth and flat exports.
- Major policy initiatives included approval of the National Pulses Mission and NITI Aayog’s Blue Economy strategy.
- Renewable energy generation grew 16.05%, with 27.2 GW of new renewable energy capacity added in the first half of the fiscal year.
Key Takeaways
- India’s macroeconomic fundamentals remained strong, with growth and inflation data creating room for policy stability.
- Investment-led expansion and green energy transition emerged as clear bright spots.
- The economy also showed signs of uneven demand, with consumer durables growing strongly while non-durables contracted.
- External sector pressures and moderating industrial indicators require continued monitoring.
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