The Indian economy shows mixed trends. Services sector remains strong, as evidenced by high PMI and e-way bill growth. Ports and railways freight movement showed steady growth. Industrial output and electricity generation faced challenges partly due to base effects as well as September rains
cooling power demand. Vehicle registrations declined ahead of the festive season. Bank credit growth moderated in September. Monetary policy stance shifted to ‘neutral’ with repo rate unchanged in October. Bonds yields are softening with continued demand from foreign portfolio investors as well as an expectation of a 75-bps cumulative rate cut over next year by RBI. Weak momentum in government capital expenditure in FYTD2025. Large forex reserves of USD 700+ billion (as of 4 October) provide sufficient import cover to RBI. Elevated food prices nudged consumer inflation in September, although still within RBI’s target range.