NEW DELHI: India will withstand trade-related uncertainties and maintain growth through the rest of 2025/26 (April-March), with the help of strong demand, steady public spending and easing inflation, the government said in its monthly economic report.
Macroeconomic developments in October indicate a stable and resilient domestic economy, supported by easing price pressures, and firm consumption trends, said the report released on Thursday.
However, the external environment continues to face elevated trade-policy uncertainty, and “global uncertainties warrant continued vigilance,” it said.
The U.S., India’s biggest trade partner, doubled tariffs on certain Indian imports to 50% in late August over New Delhi’s Russian oil purchases, although both sides remain in talks for a trade deal.
To cushion the economy from trade-related uncertainties, Prime Minister Narendra Modi’s government has announced a $5.1 billion support package for exporters and sweeping consumption tax cuts to boost demand.
Rural consumption continued to strengthen on favourable agricultural income and healthy crop output while recovery in urban consumption gained momentum post tax cuts, the report said.
Retail inflation in October slumped to a record low of 0.25% in October, driven by a sharp fall in food prices and tax cuts on consumer goods.
India’s economy is projected to grow at 7.3% in the July–September quarter, according to a Reuters poll, underpinned by strong rural and government expenditure even as private capital spending remained subdued.
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