The Indian economy continues to demonstrate resilience amid global uncertainty and market volatility, the Reserve Bank of India said on Wednesday, citing the robust performance of the agriculture sector and improving consumption.
The Indian economy recorded a sequential pick-up in growth during the December quarter, driven by private consumption and government spending, the central bank said in its bulletin for March.
Macroeconomic fundamentals remain strong and economic growth is poised to sustain momentum, driven by robust domestic demand, steady investment activity and ongoing policy-driven infrastructure development, along with a pick-up in government spending. High-frequency indicators suggest that aggregate demand continued to remain resilient in the March quarter, it added.
While facing challenges from weakening global trade and tariff uncertainty, India's external sector continues to find support from resilient services exports, which remain less affected by global disruptions. The reverberations of a tumultuous external environment are being reflected in sustained foreign portfolio outflows, the bulletin said.
India's structural strengths —sound fiscal policies, a well-calibrated monetary framework and digital transformation initiatives — are expected to provide a strong foundation for long-term sustainable economic growth.
Other Highlights:
In its outlook for seasonal temperature during the hot weather season, the India Meteorological Department has projected above-normal maximum temperatures over most parts of the country during March to May 2025.
Above-normal temperatures may lead to an increase in power demand.
However, India's rising focus on the electricity generation from renewable sources, especially solar, may help in meeting increased power demand during the summer season
High-frequency food-price data for March so far show an increase in cereal prices, both for rice and wheat.
Edible oil prices have firmed up as well, mainly driven by palm, soybean and sunflower oil. Pulses prices continued to show broad-based moderation.
Prices of key vegetables, including potato, onion and tomato, witnessed further correction.
Robust kharif production, better rabi sowing coupled with higher reservoir levels and seasonal winter correction in vegetable prices augur well for food inflation, although volatility in commodity prices and weather anomalies remain potential upside risks to the overall inflation outlook.
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