New Delhi: Navigating the global uncertainty, the Indian economy has been anchored by solid macroeconomic fundamentals and policy interventions to cushion downside risks, the Reserve Bank of India (RBI) said in its October 2026 issue of its monthly Bulletin on Friday, adding that the domestic economy continues to demonstrate strength as evidenced by high-frequency indicators across both industry and services.
Despite being a net energy importer, GDP growth has been supported by sustained domestic demand and services.
“Headline CPI inflation edged up over the months and showed signs of greater generalisation across commodities, calling for a commensurate change in the monetary policy stance. The external headwinds are also being dealt with a slew of regulatory measures by the Reserve Bank to curb speculative activity in the foreign exchange market,” the RBI Bulletin stressed.
Strong inflows under the FCNR (B) swap window augmented reserves, while FDI, ECB, and remittance flows strengthened in August. With strong export growth, the trade deficit narrowed in September, it added.
According to the monthly document, the headline Consumer Price Index (CPI) inflation edged up in September, driven by a broad-based increase in food, fuel, and core components.
“Double-digit growth in merchandise exports during the first six months of 2026-27 helped in narrowing the trade deficit. FDI, ECB, and remittance flows strengthened in August. Strong inflows under the FCNR(B) swap window augmented reserves,” it said.
On the supply side, manufacturing grew at a robust pace, while services activity strengthened further on the back of buoyant domestic and external demand. The kharif sowing concluded with total acreage above its normal level amidst a deficient and uneven southwest monsoon.
After a depreciating bias till early October, the Indian rupee gained following the Reserve Bank’s measures to curb speculative activity in the forex market, said the Bulletin.
External commercial borrowing (ECB) activity strengthened during April-August 2026, with both registrations and net inflows marking an improvement over the previous year. External sector vulnerability indicators remained contained, supported by adequate foreign exchange reserves, it added.
The Indian economy has withstood the shocks well. The IMF raised India’s growth projection for 2026-27 by 60 basis points (bps) to 7.0 per cent, from its July estimate, citing stronger-than-expected momentum, driven by resilient domestic demand and robust services activity.
–IANS–
