Welcome to India Market Access
Macro Economic Overview
GDP growth rates for BRICS
India continues to outperform other BRICS economies, reinforcing its position as the world’s fastest-growing major economy despite ongoing global uncertainties. In the fourth quarter of FY26 (January–March), GDP growth stood at a robust 7.8%, notably higher than that of other large economies, despite disruptions arising from the West Asia conflict, underscoring India’s resilience and sustained growth momentum. For the full year, India’s economic growth accelerated to 7.7% in FY26, up from 7.1% in the previous year, supported by robust domestic fundamentals.
Quarterly Y-o-Y Real GDP growth for BRICS nations (in %)
Source: CEIC, NSE EPR
Notes: 1) GDP data for Brazil, South Africa, India and Russia available till March 2026
CPI trend for BRICS
Inflation across BRICS nations continues to remain benign with India’s retail inflation has inched up to 3.9% in May, driven by food inflation (4.5%) and higher fuel prices (petrol: 3.1% and diesel: 3.4%). However, core inflation (excluding fuel and jewellery) remained contained at 2.2% YoY.
YoY% change in Consumer price inflation for BRICS
Notes: 1) Data for South Africa available till April 2026.
Fiscal Balance
India’s fiscal position reflects continued consolidation, with improving deficit indicators supported by strong revenue mobilisation and disciplined expenditure. The Central Government fiscal deficit is budgeted at 4.3% of GDP in FY27, lower than 4.4% in FY26, while the overall general government deficit (Centre+ States) is estimated at 7.4% of GDP in FY26. Overall, the government remains on track with its fiscal roadmap while sustaining capital expenditure to support growth, reflecting a balanced approach of discipline and development.
General Government Fiscal Balance as a Percentage of GDP
Country Economic Data (2014-2026)
Note:
1) Data for India is for the respective fiscal years. For example: 2024 pertains to the fiscal year FY25 (April 2024 to March 2025) and so on. For all other countries, the data pertains to calendar year.
2) Definition of General Government fiscal balance as a % of GDP: IMF defines this as Net lending (+)/ borrowing (-) is calculated as revenue minus total expenditure. This is a core GFS balance that measures the extent to which general government is either putting financial resources at the disposal of other sectors in the economy and nonresidents (net lending), or utilizing the financial resources generated by other sectors and nonresidents (net borrowing). This balance may be viewed as an indicator of the financial impact of general government activity on the rest of the economy and nonresidents (GFSM 2001, paragraph 4.17). Note: Net lending (+)/borrowing (-) is also equal to net acquisition of financial assets minus net incurrence of liabilities.
3) General Government includes Centre, States and Local Governments.
4) Positive balance indicates surplus, negative balance indicates deficit.
5) Projections for Brazil, France, Japan start after year 2024 and for all other countries it starts after 2025.
Source: IMF World Economic Outlook – April 2025
Policy rate
In the 12 months ended May 2026, policy rates generally trended lower across major economies, supported by easing inflationary pressures. However, Australia and Japan witnessed policy rate increases during this period. In the recently concluded MPC, RBI maintained the policy rate at 5.25%, maintaining status quo for the third consecutive meeting. RBI has cumulatively reduced policy rates by 100 bps since January 2025. Overall, major central banks remained cautious while balancing growth concerns, inflation dynamics and evolving global uncertainties and some major economies like Australia, South Africa, Indonesia hiking rates since the onset of the West Asia crisis.
Nominal policy repo rate
Source: CEIC, LSEG Workspace, NSE EPR.
Notes: 1) UAE = United Arab Emirates
Yield on Government Bonds
Yields of 10-Year Government Bonds (in %)
Source: LSEG Datastream
Notes: 1) Data updated till May 2026
Yields of 1-Year Government Bonds (in %)
Source: LSEG Datastream
Notes: 1) Data updated till May 2026
India PMI (Purchasing Managers Index)
India’s PMI indicators remained in the expansionary zone in May 2026, reflecting continued resilience in economic activity. Manufacturing PMI stood at 55, while Services PMI was higher at 59.8, with the Composite PMI at 59.3. Both Manufacturing and Services PMI have remained above the neutral 50-mark throughout the past three years, indicating sustained expansion across the economy. India also stands out among major economies for sustaining PMI readings in the expansionary zone over an extended period.
Trends in India’s PMI Manufacturing, Services and Composite Index
Source: CMIE Economic Outlook
Exchange rate and FX reserves
India’s foreign exchange reserves remained healthy at US$ 682.3 bn as of end-May 2026, providing necessary buffers against external vulnerabilities. India rupee has depreciated significantly to multi-year lows in recent months to Rs 96.8/$ amidst stronger US dollar and sustained FPI outflows while recent measures undertaken by the RBI and Government has led to some appreciation support till mid-June.
Monthly Trends in India’s forex reserves and 12M rolling average exchange rate
Forex Reserves & Exchange Rate
Source: RBI, CMIE Economic outlook, LSEG Datastream, NSE EPR
Notes: 1) FX reserves as of end of month.
2) ER stands for the exchange rate (Rs/ US$), which is the 12M rolling monthly average.