India’s Growth Momentum Strengthened on Festive Demand

Mumbai: The Indian economy showed signs of a further pick up in momentum in October supported by Goods and Services Tax (GST) rate reductions and a pickup in festive spending despite global headwinds said the Reserve Bank of India (RBI) Bulleting released on Monday.

The central bank said that the fiscal, monetary, and regulatory measures undertaken so far this year should pave the way for a virtuous cycle of higher private investment, productivity, and growth, leading to long-term economic resilience.

“Demand conditions exhibited signs of improvement with the revival of urban demand and continued strength in rural demand. High-frequency indicators of overall economic activity remained robust in October, supported by Goods and Services Tax (GST) rate reductions and a pickup in festive spending,” said an article on 'State of the Economy' published in the November bulletin.

The improved macroeconomic frameworks and outcomes have not only enhanced the ability of financial institutions to support the macroeconomy but also allowed the Reserve Bank to better calibrate regulatory measures, to improve the efficiency of financial intermediation and augment the flow of credit to the broader economy said the RBI in the Bulletin.

“The fiscal, monetary, and regulatory measures undertaken so far this year should pave the way for a virtuous cycle of higher private investment, productivity, and growth, leading to long-term economic resilience,” added the RBI.

Speaking about economic indicators, the central bank said that the quarterly results of listed private companies in manufacturing and services showed an uptick in sales growth. Inflation has moderated to a historic low and remained well below the target rate. GST collections improved over the previous month, indicating a strong pick up in consumer demand. Sowing of all rabi crops is progressing well following the harvesting of kharif crops. High-frequency indicators for October suggest further broadening of manufacturing activity and continued robust expansion in the services sector. Merchandise trade deficit widened to an all-time high in October 2025. While exports contracted after remaining in expansion for three months, reflecting the adverse impact from global headwinds, imports surged on account of higher gold and silver imports, catering to the festive demand.

The central bank noted that the external sector’s capacity to absorb shocks has also improved over time, building resilience amid global trade policy uncertainties.