India’s growth journey strengthened amid global uncertainties due to strong economic indicators!
India’s economy grew at a rate of 7.7 percent in fiscal year 2025-26, making India the fastest growing major economy in the world. The growth rate further accelerated in the last quarter and real GDP growth in the fourth quarter was 7.8 percent, which is more than 7 percent in the same quarter last year. Manufacturing, service sector, consumption and investment contributed significantly to this growth.
The country’s manufacturing sector also continues to remain strong. HSBC India Manufacturing PMI stood at 54.2 in June 2026, which remains above the 50-mark for the 37th consecutive month. This indicates that manufacturing activities are continuously expanding.
According to the survey, output, new orders, employment and purchasing activity have shown steady growth, reflecting strong domestic demand and business confidence despite global challenges.
Positive trends were also seen in the service sector. HSBC India Services PMI Business Activity Index rose to 59.8 in May 2026 from 58.8 in April, marking the fastest expansion since November 2025.
Industrial production also continues to improve. The Index of Industrial Production (IIP) increased from 4.9 percent in April to 5.1 percent in May 2026, the highest level in the last five months. 5.5 percent growth in manufacturing sector and 9.9 percent growth in electricity and gas supply contributed significantly to this growth. At the same time, sectors like motor vehicles and electrical equipment recorded strong double-digit growth.
Moreover, capital goods production recorded a growth of 12.9 per cent, indicating a pick-up in investment activities and expansion of industrial capacity.
The capital expenditure (capex) campaign of the central government is also progressing rapidly in the new financial year. Capital expenditure during April-May 2026 stood at Rs 2.51 lakh crore, compared to Rs 2.21 lakh crore in the same period last year. That means additional capital investment of about Rs 29,650 crore was made in just two months.
This investment by the government is being made mainly in roads, railways, telecom, defense and other infrastructure sectors, which remain a major part of the public investment strategy.
Tax collections also remain strong despite global uncertainties. The gross tax revenue during April-May 2026 was higher than the previous year, which makes it clear that the revenue base of the government remains stable.
Gross GST collection increased by 13.9 percent to about Rs 1.95 lakh crore in June 2026, compared to Rs 1.71 lakh crore in June last year.
At the same time, net direct tax collection in the current financial year till June 17 increased by 14.64 percent to Rs 5.21 lakh crore, in which good growth was recorded in tax collection from both corporate and non-corporate categories.
Despite the situation in West Asia and pressure from global energy prices, softening of crude oil and fertilizer prices has helped the government move forward on its fiscal consolidation target for FY 2026-27.
Trade and logistics activities also remain strong. The number of e-way bills in May recorded a year-on-year growth of 10.9 per cent, indicating robust movement of goods and economic activity across the country.
Demand in the automobile sector also remains strong. Vehicle sales continued to show good performance during April to June 2026. Retail sales of 26.11 lakh vehicles were recorded in April, which is the highest figure for any April month in the history of India’s auto retail market.
There is a positive trend in the rural economy also. Automobile sales in rural areas grew 7.8 percent in May, indicating that rural demand remains strong despite a high base.
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