A broad set of indices offering granular insights across various facets of the Indian economy
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Near-term Outlook
The index continues to signal expansion, but momentum has cooled further and more sharply than in June, with the PMI slipping to a 53-month low in July rather than stabilising as hoped.
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India’s industrial sector is expected to maintain a positive growth trajectory in FY27, supported by government infrastructure spending, PLI-led manufacturing expansion, resilient domestic consumption, and continued diversification of global supply chains toward India.
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Agricultural growth faces downside risks due to weak monsoon expectations. Below-normal rainfall could lower kharif output and overall agri GVA growth, which is currently expected around ~3% (with downside bias).
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Inflation has moved further and faster into "mild reflation" territory than flagged in June, with headline CPI now above the RBI's 4% target for a second straight month and food inflation continuing to climb, keeping food-price dynamics the dominant swing factor for the months ahead.
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The index continues to reflect cautious optimism, consistent with June, though July's volatility, a dip toward 23,700 on the Nifty before a month-end recovery, underscores that markets remain highly sensitive to crude oil and geopolitical headlines rather than settling into a stable trend.
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The Global Economic Impact Index suggests moderate external headwinds but strong domestic resilience, with India well-positioned to manage global volatility due to healthy macro buffers.
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The banking system continues to show strength, with credit growth accelerating to its fastest pace since May 2024 and deposit growth hitting a near-decade high, suggesting earlier credit-deposit gap concerns are easing faster than expected.
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The index continues to point to an extended pause, reinforced rather than reversed by August's MPC outcome, with the RBI's upward GDP revision to 6.7% giving it room to hold rather than ease even as CPI has moved above target.
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