Economy Beats Forecasts but Global Headwinds Raise Concerns

New Delhi/Mumbai, Aug 30:

India’s economy posted better-than-expected growth in the April–June quarter, driven by strong consumer demand, robust services output, and steady infrastructure spending.

The upbeat data offers breathing space for policymakers, especially with retail inflation easing in June and July. However, looming challenges remain. The U.S. decision to impose higher tariffs on Indian goods has clouded export prospects, particularly for textiles, engineering goods, and IT services.

The rupee has also shown signs of volatility, prompting close monitoring by the Reserve Bank of India (RBI). Economists say while domestic demand is strong, “external shocks could weigh heavily on India’s recovery momentum.”

Markets reacted cautiously, with the Sensex edging higher but traders showing restraint amid concerns about oil prices and currency stability.