Week in Numbers: Tracking India’s Economic Pulse

India’s retail inflation, based on the Consumer Price Index, rose to a one-year high of 3.40% in March from 3.21% in February, driven by higher prices for food, cooking gas, and tobacco. The food index rose 0.3% month-on-month, pushing annual food inflation to 3.87% from 3.47%. Within food, tomato and cauliflower prices rose 36.0% and 34.1% year-on-year, respectively.

Despite a marginal sequential decline, inflation in the personal care, social protection, and miscellaneous goods and services category remained the highest among major groups at 18.7%. Even so, annual inflation in silver jewellery and gold, diamond, and platinum jewellery eased to 148.6% and 45.5%, respectively.

Core inflation, excluding food and fuel, eased to 3.3% from 3.4%. Core-core inflation, which also excludes precious metals, remained steady at 1.9%.

Retail inflation averaged 2.0% in 2025-26, less than half of 4.6% in the previous year.

The sharp increase in crude oil and gas prices due to the war in West Asia is likely to push up retail prices in the coming months. The effect is already visible in higher prices for cooking gas and aviation jet fuel. However, the full impact will be felt only if the government allows state-owned oil marketing companies to raise petrol and diesel prices.

 

India’s annual wholesale price inflation rose to a 38-month high of 3.88% in March from 2.13% in February, driven largely by higher crude oil and petroleum product prices. On a month-on-month basis, the Wholesale Price Index increased 1.6% in March, the steepest rise in 32 months.

Among the three major groups, inflation in manufactured products climbed to a 40-month high of 3.39%, led by higher prices of manufactured food products and base metals. Inflation in primary articles rose to a 17-month high of 6.36%, driven by a 36.2% month-on-month increase in crude petroleum and natural gas prices. Inflation in the fuel and power group rose to a 20-month high of 1.05% in March, led by an 8.8% month-on-month increase in mineral oil prices.

Core inflation rose to a 41-month high of 3.7% in March from 3.3% in February. WPI inflation is likely to rise in the near term due to a continued low base effect and higher energy and commodity prices.

WPI inflation averaged 0.7% in 2025-26, compared with 2.3% a year earlier.

 

India’s unemployment rate rose to a five-month high of 5.1% in March from 4.9% in February, led by an increase in urban unemployment. The urban unemployment rate rose to 6.8% from 6.6%, while the rural rate rose to 4.3% from 4.2%. Unemployment among urban youth rose to 18.4% in March from 18.3% a month earlier. Meanwhile, the overall labour force participation rate fell to 55.4% in March from 55.9% in February.

 

India’s merchandise trade deficit narrowed to $20.67 billion in March from $27.10 billion, despite a sharp surge in crude oil prices. India’s crude oil basket rose 64% month-on-month to $113.49 per barrel following the war in West Asia. The trade deficit in March was also marginally lower than a year ago.

India’s exports and imports declined 7% each to $38.92 billion and $59.59 billion, respectively. In absolute terms, imports in March were the lowest in nine months. Oil imports declined 36% year-on-year to $12.18 billion, suggesting that March reflects supply constraints rather than the price shock.

The likely widening of the trade deficit has been deferred rather than avoided. If the energy shock persists, the deficit is likely to widen in the coming months.

 

Automobile wholesales remained robust in March, with total dispatches rising 18.7% year-on-year to 2.49 million units. The growth was broad-based, driven by strong demand across two-wheelers, passenger vehicles, and three-wheelers. Wholesale momentum has persisted since the government’s GST rate cuts in late September, with cumulative sales rising 20.5% over the past six months, compared with 0.5% in the previous six months.

Two-wheeler dispatches increased 19.3% to 1.98 million units, supported by a 29.8% surge in scooters and a 12.9% rise in motorcycles. Passenger vehicle wholesales grew 16.0% to 442,460 units.

Automobile production rose 20.2% to 2.98 million units, indicating that manufacturers expect demand to remain strong in the months ahead.

 

India’s coal production contracted 4.1% year-on-year to 113.67 million tonnes in March, marking the first contraction in five months. Coal dispatches increased 1.5% to 96.78 million tonnes. Coal production and demand in recent months have been dampened down by lower thermal power generation and higher renewable output. Thermal power generation in April-February declined 4.4% to 1,187.05 billion units, while renewable energy generation increased 19.1% to 441.32 billion units.

Coal production and dispatches in 2025-26 contracted 0.6% each to 1,040.83 million tonnes and 1,019.50 million tonnes, respectively.

 

India’s foreign exchange reserves rose to a four-week high of $700.95 billion as of April 10, increasing by $3.83 billion during the week. Foreign currency assets rose by $3.13 billion to $555.98 billion, while gold holdings increased by $610 million to $121.34 billion. The rupee appreciated 0.4% against the US dollar in the week to April 10, following curbs announced by the Reserve Bank of India on banks’ foreign exchange exposure.

Summer crop area increased 1.2% year-on-year to 6.41 million hectares as of April 10. Rice, which accounts for over 40% of the total summer crop area, fell 5.3% to 3.06 million hectares. Pulses rose 7.7% to 1.15 million hectares, while oilseeds increased 9.1% to 0.83 million hectares.

 

 

 

Food grain stocks with the government remained at record highs as of April 1. Total grain stocks, excluding unmilled paddy, stood at 60.40 million tonnes — the highest ever for April 1. Rice stocks were at 38.61 million tonnes, the highest on record, while wheat stocks were at 21.79 million tonnes, the highest for April 1 in five years. The government also held 50.01 million tonnes of unmilled paddy, equivalent to about 33.51 million tonnes of rice. High stocks have prompted the government to allow wheat exports after nearly four years.

 

The India Meteorological Department has predicted that southwest monsoon rainfall in 2026 is likely to be below normal, at 92% of the long-period average. This is the lowest first-stage monsoon forecast since 1997, when the rainfall was also projected at 92% of the long-period average.

The weather bureau expects below-normal monsoon rainfall due to the likelihood of El Niño developing during the season, which is typically associated with weaker rainfall in India. Of the 16 El Niño years since 1950, seven have been below-normal monsoon rainfall in India. The last time the southwest monsoon was at or below 92% was in 2018. 

Pre-monsoon rainfall has picked up sharply after a weak start, with cumulative precipitation for March 1 to April 16 at 54.3 mm, 11% above the long-period average of 48.8 mm. 

Coming up

• Apr 20: Index of Eight Core Industries for March
• Apr 23: HSBC India Flash PMI for April
• Apr 28: Index of Industrial Production for March 

Tailpiece
India’s merchandise trade deficit widened to a record $333 billion in 2025-26 as imports rose 7.5% to $775 billion during the year. Exports rose 0.9% to $442 billion despite the punitive tariffs imposed by the US and the war in West Asia toward the end of the year.