New Delhi- India has continued to rank among the world’s fastest-growing major economies despite global uncertainties, with economic activity maintaining its momentum through June, according to the Reserve Bank of India (RBI).
In its July Bulletin, the central bank said both the industrial and services sectors remained resilient, helping the domestic economy weather a challenging global environment marked by supply chain disruptions and fragmented trade relationships.
While the southwest monsoon has been uneven across parts of the country, the RBI noted that adequate foodgrain stocks are expected to help cushion the impact on food inflation.
The bulletin also highlighted strong external trade performance during the first quarter of 2026-27, with exports and imports recording robust growth.
“The momentum of external trade sustained as reflected in high growth in exports and imports in Q1 2026-27. This is likely to be strengthened by the recent operationalisation of the India-UK Comprehensive Economic and Trade Agreement and progress in other bilateral trade agreements,” the RBI said.
According to the central bank, India’s external vulnerability indicators continue to remain strong, while the recovery in foreign investments over recent months reflects renewed investor confidence in the country’s economic prospects.
Despite ongoing global uncertainty, the RBI said the Indian economy has successfully navigated external challenges, supported by healthy domestic demand and the resilient performance of the industrial and services sectors.
The bulletin noted that headline retail inflation edged up in June, but core inflation—excluding precious metals—remained subdued. It also said liquidity conditions improved further, supporting robust credit growth across the economy.
“India’s external sector remains steady with improving outlook, aided by inflows of foreign investments,” the RBI said.
The report further stated that both gross and net foreign direct investment (FDI) during April-May 2026 were higher than in the corresponding period last year. Net foreign portfolio investment (FPI) flows turned positive in June and continued to remain in positive territory in July, supported by favourable policy measures and easing geopolitical tensions.
The RBI also observed that Indian equity markets posted gains in June. However, after the ceasefire ended in early July, stock markets largely remained range-bound.
The central bank added that India’s key external sector vulnerability indicators remained well anchored as of the end of March 2026, reflecting the country’s overall macroeconomic stability.
With inputs from IANS