​Speed bumps ahead, Pg6

Key Highlights:

• India's Q2 GDP growth reached a six-quarter high of 8.2%.
• The Index of Industrial Production (IIP) growth in October 2025 hit a 14-month low of 0.4%.
• Manufacturing sector growth slowed to 1.8% in October according to IIP data.
• Merchandise exports contracted by nearly 12% in October.
• Manufacturing PMI stood at a nine-month low of 56.6 in November.
• Consumer durables and non-durables sectors contracted, marking their worst performance in two years.
• GST revenue in November was ₹1.7 lakh crore, reflecting slower-than-expected demand.

Detailed Insights:

• The high GDP growth rate in Q2 was partially due to a low base effect from the previous year's 2.2% growth.
• US tariffs are impacting India's exports, with new export orders rising at their slowest pace in over a year.
• Subdued exports and weather changes negatively affected the manufacturing, electricity, and mining sectors.
• Investment growth may have slowed in Q3, with the capital goods sector growing at a 14-month low of 2.4%.
• Contraction in the consumer durables and non-durables sectors indicates a potential slowdown in household consumption.
• The GST rate rationalisation did not immediately boost demand as anticipated by the government.
• Initial economic indicators suggest that Q3 may not be as positive for the Indian economy.

Key Concepts Involved:

• GDP (Gross Domestic Product): The total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
• IIP (Index of Industrial Production): An index that shows the growth rates in various industry groups of the economy in a fixed period.
• PMI (Purchasing Managers' Index): An indicator of the economic health of the manufacturing sector, based on new orders, inventory levels, production, supplier deliveries and the employment environment.
• GST (Goods and Services Tax): An indirect tax used in India on the supply of goods and services.