This Week In Economics (23 – 30 April)
Welcome to another edition of This Week In Economics, where I compile all the biggest economic news of the week in context of India.
Note: There is no need to make notes out of it, you can simply read the headlines and the content once in a while, that’ll be more than enough for most exams.
West Asia Crisis
The RBI’s April bulletin warned that persistent conflict in West Asia and supply chain disruptions could pose challenges to the domestic economy in the form of higher energy costs, input cost pressures, disruption in trade flows, and financial market spillovers.
RBI Governor Sanjay Malhotra highlighted that the West Asia region accounts for approximately one-sixth of India’s exports, half of its crude oil imports, and nearly two-fifths of inward remittances.
RBI Bulletins and Policy Signals
The RBI issued a draft Master Direction on Prepaid Payment Instruments (PPIs), inviting public comments by May 22, 2026, as part of efforts to enhance transaction security and strengthen the digital payments framework.
The RBI’s new Expected Credit Loss (ECL) framework is expected to lower CET-1 ratios and increase provisioning for banks in early years, though banks are likely to absorb the impact gradually over time.
Rupee Under Pressure
The rupee hit a fresh intra-day low of around 95.34 against the dollar on April 30, burdened by the continued West Asia conflict and sustained FII outflows.
The World Bank’s Lead Country Economist for India endorsed the RBI’s consistent approach of managing short-term volatility while allowing market forces to guide the rupee’s broader trajectory, describing it as making “a lot of sense.”
GDP and Growth Forecasts
The World Bank revised India’s GDP growth forecast for the current fiscal year upward to 6.6%, a 30 basis point increase, attributed to robust domestic demand and recent trade agreements with the EU and the US.
The World Bank’s South Asia Economic Update estimated India’s GDP growth at 7.6% for FY2025–26, driven by strong private consumption, GST rationalization, and export resilience, while projecting a moderation to 6.6% in FY2026–27 due to Middle East conflict headwinds.
Industrial Production (IIP)
The Index of Industrial Production (IIP) recorded 4.1% year-on-year growth in March 2026, reflecting continued industrial momentum.
Trade Developments
India–Kenya bilateral trade rose nearly 25% to US$ 4.31 billion in FY26, strengthening bilateral economic engagement and sectoral cooperation.
Commerce Minister Piyush Goyal chaired a review meeting on the Plan of Action for achieving India’s US$ 2 trillion export target by 2030–31, with a structured monitoring framework and MSME-focused Export Promotion Mission.
Aviation Sector Hit
The West Asia crisis severely impacted Indian domestic carriers, with international departures cut by 40% and passenger traffic declining by 36.5% in March compared to March 2025, with April being the worst-hit month.
Energy and Infrastructure
Nearly one-third of India’s record peak power demand of 256 GW was met through renewable energy, according to Union Minister Pralhad Joshi.
Prime Minister Modi inaugurated the 594 km Ganga Expressway connecting Meerut to Prayagraj, expected to boost logistics, investment, and regional growth across Uttar Pradesh.
Labour Force Participation
The share of females in India’s labour force jumped from 23.3% to 40% over seven years, reflecting strong progress in women’s employment and economic inclusion.
India’s Global Economic Ranking
The IMF projected India to slip to the 6th largest economy in 2026 with a nominal GDP of $4.15 trillion, partly due to an 11% rupee depreciation against the dollar and a GDP base year revision from 2011–12 to 2022–23 which reduced earlier overestimation.
Ciao, until next week’s edition.
