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India’s Growth Pulse: Tracking India’s Economic Momentum

  • Calendar September 2026
  • Issue 16th Issue

Publication Team

Manasa Sriram
Lead Editor
Ankit Jha
Editor
Shristi Choudhary
Author
Divyani Patidar
Co-Author
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Executive Summary

India’s economic activity strengthened in August 2026, with real GDP growth at 7.8%, IIP growth at 8.0% and manufacturing growth at 9.0%. Domestic activity remained firm, while inflation rose, with CPI at 4.82% and WPI at 9.92%. Exports grew 25.41%, although the cumulative April–August trade deficit widened to US$60.38 billion. Agriculture remained a watchpoint, with Kharif acreage 1.6% below last year and the southwest monsoon ending 12.6% below its long-period average.

Key Developments

  • Growth strengthened: Real GDP grew 7.8% in Q1 FY2026–27, while August IIP growth rose to 8.0%; the September flash Composite PMI increased to 56.5.
  • Manufacturing gained momentum: Manufacturing IIP grew 9.0%, led by electrical equipment (30.9%), other transport equipment (25.3%) and motor vehicles (25.2%).
  • Inflation picked up: CPI inflation rose to 4.82%, food inflation to 5.95%, while WPI inflation increased to 9.92%.
  • Exports surged: Total exports grew 25.41% to US$82.68 billion, with electronic goods exports rising 89.82% and petroleum-product exports 63.27%.
  • Fiscal and financial indicators remained firm: August GST collections reached ₹1.99 lakh crore, while bank credit and deposits grew 19.1% and 17.8%, respectively.
  • Agriculture remained mixed: Kharif acreage was 1.6% below 2025 levels, while pulses acreage increased 1.6% and rice acreage declined 3.7%.
  • Infrastructure and energy activity remained strong: Peak power demand reached 258.3 GW, electricity consumption was around 13% higher year-on-year, and renewable capacity increased by 3.83 GW.

Key Takeaways

  • Growth momentum strengthened, with manufacturing, capital goods and domestic activity showing broad-based improvement.
  • The composition of industrial growth remains encouraging, with capital goods growing 16.9% and intermediate goods 13.7%, pointing to continued investment and production activity.
  • Inflation has re-emerged as a key watchpoint, particularly food and fuel prices, even as the RBI maintains a neutral policy stance.
  • External performance remains mixed: strong monthly export growth contrasts with a significantly wider cumulative trade deficit.
  • Agricultural conditions warrant monitoring, given below-normal monsoon rainfall and continued weakness in rice acreage.
  • The policy spotlight on GOBARdhan highlights a shift towards building an integrated CBG market, combining procurement obligations, pricing support, capital assistance, pipelines and credit guarantees within a ₹23,731 crore framework.

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Find out the trends and predictions of India's evolving economic momentum in the recent times.

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