Macro Memo | October 2025

One Mercedes every six minutes over Navratri. Shopping floors packed with Diwali buyers. Electronics flying out of export lanes. Cards and UPI humming at fingertip speed. The groundwork done over the last decade is now starting to show impact.

Read on for a quick glance at the forces pushing India forward right now.

Growth Outlook & Macro Signals

• IMF outlook: FY26 GDP growth forecast raised to 6.6% (from 6.4%) on resilient demand and exports.
• Tax receipts: Net direct tax revenue reached ₹11.89 lakh crore by mid-October, up 6.3% year-on-year.
• FX reserves: Climbed to $702.28 billion, strengthening India’s external buffer against global volatility.
• Deloitte outlook: Deloitte now pegs India’s FY26 GDP growth at 6.8%, noting low inflation, firmer rural demand, and a pickup in private investment.

  “IMF raising India’s growth forecast is proof of country’s economic resilience.”

  — Piyush Goyal, Minister of Commerce and Industry

Consumer Firepower, Payments at Scale, and Household Balance Sheets

• Record festive sales: Diwali retail sales crossed ₹6 trillion (CAIT), the highest on record, supported by GST rate cuts, stable prices, and stronger purchasing power.
• Made-in-India tilt: 87% of buyers chose Indian-made goods, with consumer confidence index (CCI) at ~8.4/10 (CAIT survey).
• Luxury momentum: Mercedes-Benz sold one car every six minutes during the nine days of Navratri (~2,500 units; +36% YoY).
• Payments & credit: UPI dominated festive-season digital payments, with UPI volumes up 30% during Diwali. Credit card e-commerce volumes grew 22% YoY.
• Household savings base: EPF corpus exceeds ₹24.7 lakh crore (nearly 5x in a decade), indicating deeper, more formal household balance sheets.

  “I’m very big on India because of the boldness of their reforms. For example, everyone told India that digital identity on a mass scale could not be done… but India proved them wrong.”

  — Kristalina Georgieva, Managing Director, International Monetary Fund

Indices Near Peaks; IPO Flows Jump; Infra Gathers Pace

• Equities: The Nifty 50 and Sensex hovered just shy of all-time highs in late October, led by consumer and banking stocks.
• FPI in IPOs: Foreign Portfolio Investors brought in ₹10,096 crore into IPOs in October (second-best month of 2025); ₹54,000 crore YTD in primary inflows signals sustained overseas appetite for India’s long-term growth stories.
• Tech signal: Salesforce CEO Marc Benioff called India “of strategic importance” to future expansion plans, underscoring India’s weight in global tech roadmaps.
• Rail capex: Four railway projects approved with a ₹24,634 crore outlay.
• Data centres: Renewed momentum with $50+ billion in upcoming capacity from global and domestic players.
• Power reform: The Electricity Amendment Bill 2025 was introduced, addressing a key bottleneck for large power users, which is critical for scaling manufacturing and data infrastructure.

Exports Grow; Electronics Scale; Trade Routes Diversify

• Merchandise exports: India’s exports returned to growth in September at $36.4 billion.
• Electronics scale-up: Electronics exports reached $22.2 billion in H1 FY26, up 42% year-on-year; the category is now India’s #3 export (after petroleum and gems) and closing in on #2.
• Supply-chain shift: iPhone production accounted for nearly half of electronics exports, reflecting deeper integration into global manufacturing chains.
• Trade route diversification: India is exploring Africa, Latin America, and Southeast Asia to reduce reliance on single markets and tariff-exposed corridors.
• Market access (UK): The India–UK FTA is nearing finalization, described by London’s Deputy Mayor as “deeper than Brexit deals or Trump-era trade pacts.”

  “If India has to grow at the rate at which you’re talking about in terms of being fixed by 2047, India has to fire all cylinders. Strengthen domestic demands, build internal integration within India… But also, there is an opportunity here for India to integrate itself in global supply chains.”

  — Krishna Srinivasan, Director, IMF Asia-Pacific Department

Research Analyst

Simran Mehla

Frequently Asked Questions

Q: What is India’s current GDP growth outlook for FY26?

A: The International Monetary Fund (IMF) has raised India’s FY26 GDP growth forecast to 6.6%, up from 6.4%, citing resilient domestic demand and stronger export performance. Deloitte’s outlook is even higher at 6.8%, pointing to moderating inflation, improving rural demand, and a rebound in private investment.

Q: What are the major drivers of consumer spending this festive season?

A: Diwali retail sales crossed a record ₹6 trillion, the highest on record. Consumer sentiment has been buoyed by GST rate cuts, stable inflation, and growing disposable income. Notably, 87% of buyers opted for Indian-made products, reflecting stronger domestic brand preference and rising purchasing confidence.

Q: How are digital payments and credit growth evolving?

A: The festive season saw UPI volumes rise about 30%, maintaining India’s global lead in real-time payments. Credit card e-commerce volumes grew 22% year-on-year, indicating healthy formal credit expansion. The broader household balance sheet has strengthened, with the EPF corpus now exceeding ₹24.7 lakh crore, nearly five times larger than a decade ago.

Q: How is India performing on exports and manufacturing?

A: India’s merchandise exports returned to growth in September, reaching $36.4 billion. Electronics exports are leading the surge: up 42% year-on-year to $22.2 billion in the first half of FY26, now the country’s third-largest export segment and closing in on gems and jewellery. iPhone manufacturing alone accounted for nearly half this output, underscoring India’s deeper integration into global supply chains.

Q: Why are global institutions so bullish on India?

A: Leaders from the IMF and global corporations alike cite India’s digital infrastructure, reform momentum, and strong domestic demand as key strengths.

Sources

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