High-frequency indicators in May this year reflect sustained economic momentum in India amid persistent external headwinds, according to BCG’s latest India Economic Monitor.
India’s growth story is increasingly being driven by investment rather than consumption, the report argues.
FDI surged to a more than five-year high in April, while inflation emerged as the BCG report’s principal area of concern.
Foreign direct investment (FDI) surged to a more than five-year high in April, supported by stronger equity inflows and lower repatriations, while inflation emerged as the BCG report’s principal area of concern.
Calendar-year FDI inflows have already reached $23 billion in 2026, indicating sustained overseas confidence in India’s long-term growth story despite an uncertain global investment environment, the report noted.
Inflation firmed further in May, with wholesale price inflation surging to 9.7 per cent on higher crude, natural gas and manufactured-product prices, and consumer price inflation reaching a 16-month high of 3.9 per cent.
Despite emerging signs of moderation, the underlying growth engine remains intact, the report indicates. Investment, manufacturing activity and digital payments continue to expand, while consumer confidence has turned softer.
India’s merchandise trade deficit narrowed to $28.2 billion in May, while foreign exchange reserves edged lower during the month as foreign currency assets and gold holdings declined.
The services sector remained the economy’s biggest growth engine, while the index of industrial production softened in April.
Fibre2Fashion News Desk (DS)
