Manufacturing Boost and Exports Drive India's Economic Momentum

New Delhi, October 29: India's manufacturing sector and external trade are providing strong support to the economy, the Finance Ministry said in its October monthly review. The ministry projects second-quarter FY27 real GDP growth at 7.35 percent.

The review noted that recent policy initiatives, investment flows and corporate-level changes point to continued efforts to strengthen manufacturing, localisation and technological capabilities. It said that broadening the manufacturing base will require scaling up, boosting domestic value addition, strengthening supply chains and maintaining export competitiveness.

India's external sector also held up despite rising global uncertainty. Total exports of goods and services rose 11 percent year-on-year in September 2026, with goods exports up 23.1 percent. Electronics and engineering products played a key role in this growth.

The review added that foreign exchange reserves, at $721 billion as of October 16, 2026, continue to support the country's external position.

On the financial side, the ministry said the domestic market remained resilient. Money market operations stayed smooth, and bank credit growth accelerated to 21.6 percent year-on-year. The effectiveness of recently raised interest rates in containing the second-round impact of inflation will depend on the central bank's active management of liquidity.