When running for reelection, India’s Prime Minister Narendra Modi and his ministers stressed that, under his administration, India had become the world’s “fastest-growing large economy.” This was never much of an achievement; after all, the People’s Republic of China was in the midst of a significant slowdown even before the trade war. But even that no longer seems to be true. According to data published recently by government statisticians, India grew at only 5.8% in the fourth quarter of its 2018-19 financial year, less than China’s 6.4% growth in that same period. (India’s financial year begins in April.) 

This is the third successive quarter of slowing growth — from 8% between April and June of 2018, to 7% between July and September and then 6.6% in the third quarter, October to December. It’s hard to see this as anything other than a straightforward slowdown, of the sort that has been predicted now for some time. Yes, many questions are constantly asked about India’s growth figures. Even if you’re not convinced by the numbers, though, the trajectory is unmistakable. 

India’s finance ministry seems certain about the reasons for the slowdown: private consumption, investment and exports are all growing less than expected. The last two — investment and exports — have been troubled for years. India’s economic numbers looked better than they were because consumption seemed to be holding up. 

Now, multiple indicators have begun to show a bit of a crisis in consumer spending as well. Passenger vehicle sales, for example, fell by 17.1% in April, the worst slide since October 2011. Large consumer goods companies are issuing warnings to investors about slowing demand. This could easily have been foretold: No economy can keep growing just on the basis of consumer demand.