India's economic momentum indicates a strong and broad-based expansion

OPEC stated in its latest monthly update that recent data suggests that the momentum seen in 1H26 continued into 3Q26 and the beginning of 4Q26, indicating a strong and broad-based expansion. Economic growth was revised up to 8.6%, y-o-y, in 1Q26 and remained exceptionally strong at 7.8%, y-o-y, in 2Q26, considerably above expectations. Growth was supported by robust private consumption, fixed investment, manufacturing, and services, confirming India?s position as one of the fastest-growing major economies despite elevated energy prices and a challenging global environment. Industrial production increased by 6.7%, y-o-y, in September, following 7.8% in August, with manufacturing expanding by 7.6% and electricity and gas output by 11.2%. Capital-goods production remained particularly strong at 10.4%, while intermediate goods increased by 12.2%, pointing to continued strength in investment and industrial activity. Vehicle demand also remained strong, with total retail sales increasing by 31.8%, y-o-y, in September, although part of the increase reflected a beneficial base effect. Labour-market conditions have also remained supportive. It noted that India is expected to remain one of the fastest-growing major economies through the remainder of 2026 and into 2027. Strong consumption, investment, manufacturing, and services provide a solid basis for continued expansion, as also reflected in the latest economic growth assessment of the RBI, which has raised its FY2026/27 growth forecast to 7.1% from 6.7%.

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