Indian Economy Exhibits Strong Resilience Amidst Global Headwinds
The Reserve Bank of India (RBI), in its latest 'State of the Economy' article published in the October 2025 Bulletin, has affirmed the Indian economy's resilience despite persistent global headwinds. The bulletin attributes this strength to robust and durable macroeconomic fundamentals, which include low inflation, healthy balance sheets of banks and corporates, adequate foreign exchange reserves, and a credible monetary and fiscal framework. The Monetary Policy Committee's October resolution revised India's real GDP growth for FY2025-26 upwards to 6.8 per cent, while projecting Consumer Price Index (CPI) inflation lower at 2.6 per cent. This positive outlook comes even as trade tensions and rising protectionism in advanced economies continue to pose uncertainties.
Diwali 2025 Sales Shatter Records, Boosted by 'Vocal for Local'
The Confederation of All India Traders (CAIT) reported record Diwali sales in 2025, reaching an unprecedented US$ 68.77 billion (Rs. 6.05 trillion). This marks a significant 25% year-on-year growth. The surge was largely attributed to recently reduced Goods and Services Tax (GST) rates, with 72% of surveyed traders linking higher sales to lower GST on daily-use items. Furthermore, Prime Minister Narendra Modi's call for 'Vocal for Local' and 'Swadeshi Diwali' resonated strongly with consumers, leading to an 87% preference for Indian-made goods and a 25% increase in sales of domestically manufactured products. The Fast-Moving Consumer Goods (FMCG) sector accounted for the largest share of these sales at 12%, followed by gold and jewellery at 10%. Trader and consumer confidence remained high, indicating a likely continuation of the consumption trend, supported by stable inflation and increased disposable income.
India Poised to Become Third-Largest Economy by 2030
India is projected to remain the world's fastest-growing major economy through 2025 and 2026, and is on track to surpass Germany to become the third-largest global economy by 2030. This economic boom is driven by strong macroeconomic fundamentals, favorable demographics, and a significant increase in consumer spending, particularly in premium goods and services. Private consumption is expected to contribute 60% of this growth, potentially making India the third-largest consumer market by 2026. The luxury goods market in India is also anticipated to experience substantial growth, reaching $12.1 billion by 2025 with a 10% growth rate, becoming a key player in the global luxury landscape.
Indian Stock Markets Closed for Diwali Holiday
Indian equity, currency, and debt markets were closed on Wednesday, October 22, for the Diwali Balipratipada holiday. This followed a positive Muhurat trading session on Tuesday, which marked the beginning of the new Samvat year 2082. During the special one-hour session, the Nifty 50 and BSE Sensex recorded their highest closing levels since September 2024, driven by optimism over corporate earnings and signs of easing U.S.-China trade tensions. Regular trading is scheduled to resume on Thursday, October 23.
Revamp of Key Economic Indicators on the Horizon
India's economic dashboard is set for a significant overhaul in early 2026. Major economic measures such as GDP, retail inflation, and industrial output will be updated to better reflect contemporary economic activity. A new index specifically for the burgeoning services sector, encompassing logistics and digital platforms, is also set to debut, offering a more precise understanding of the country's growth drivers.