India's Economy Shows Mixed Growth

The Indian economy grew by 8.2% in the July-September quarter, which is good news.

However, the rupee hit a record low of 89.7 against the US dollar due to uncertainty about a trade deal with the US and high tariffs.

The rupee later recovered slightly to 89.5.

The manufacturing sector is also struggling, with business confidence at a low due to competition and high tariffs.

Foreign investors have taken out over $16 billion from the Indian stock market this year.

The government hopes to sign a trade deal with the US by the end of 2025 to help the situation.

Despite these challenges, the economy is showing strong momentum in sectors like manufacturing, construction, and services.

The RBI is likely to cut the repo rate by 25 basis points in December due to low inflation and strong growth momentum.

Inflation has eased to a decadal low of 0.3% in October, well below the RBI's 4% target threshold, creating policy space for rate cuts.

The current repo rate stands at 5.5%.

Factors such as stable Brent crude prices, healthy reservoir levels supporting rabi sowing, and muted price pressures arising from excess capacity in China should help prevent any sharp rise in inflation.

Despite external headwinds, including prolonged trade negotiations with the US and geopolitical tensions, India's external sector remains resilient with foreign exchange reserves rising by USD 27 billion to USD 693 billion as of mid-November.