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Financial conditions, oil prices concerns for India: RBI Bulletin
Industrial activity stayed strong in many segments. The index of eight core industries witnessed an uptick. Manufacturing PMI also rose marginally as cost pressures and geopolitical spillovers kept growth momentum in new orders and output slow.
India’s economic activity in April showed resilience notwithstanding deceleration in some of the indicators, and the economy showed strength despite geopolitical and trade related uncertainties, an article in the RBI Bulletin said.
Industrial activity was strong in many segments.
However, financial conditions, crude oil prices and capital flows continue to pose challenges to the external sector outlook.
However, financial conditions, crude oil prices and capital flows continue to pose challenges to the external sector outlook, the article said.
Early results of listed private non-financial companies for the fourth quarter (Q4) of fiscal 2025-26 (FY26) also showed an improvement in business performance over the previous quarter, with aggregate sales and operating profit recording a double-digit growth.
The merchandise trade deficit widened in April this year over March, with rising import bill primarily on account of crude oil and gold imports. The trade deficit also registered an increase albeit marginally vis-a-vis April 2025.
The available high-frequency indicators of economic activity in April generally suggest sustained demand, notwithstanding challenges in a few sectors.
India is witnessing a trade reconfiguration amidst the emerging geopolitical situation, the article titled ‘State of the Economy’ noted. Its trade through the Strait of Hormuz that had declined sequentially in March went up in April this year.
Despite significant increase in input cost, operating profit growth of manufacturing companies remained broadly stable during Q4 FY26. However, the operating profit margin softened during the quarter.
However, the near-term outlook is somewhat clouded by supply side pressures, the article noted.
It said though headline inflation remains firmly within the tolerance band, the pass-through to domestic prices needs to be monitored.
Fibre2Fashion News Desk (DS)