India's economy shows resilience amid global uncertainties: RBI

The Indian economy has demonstrated resilience in the face of ongoing global challenges, characterised by buoyant domestic demand and rising activity in manufacturing and services sectors, the Reserve Bank of India said in its August bulletin on Tuesday. High-frequency indicators through July showed sustained momentum across both manufacturing and services, with merchandise exports and imports expanding at double-digit rates, reflecting the strength of economic activity.

Agricultural prospects have improved following a recovery in southwest monsoon rainfall during July, which enabled kharif crop sowing to approach normal acreage levels. This development has helped mitigate some of the risks faced by the agriculture sector, which remains crucial for India's broader economic health and rural incomes.

However, the global economic environment remains uncertain, with the RBI noting that geopolitical tensions in West Asia and fresh tariff measures by the United States continue to shape the international outlook. Consumer price index inflation has edged above the RBI's target, though the central bank attributed this primarily to supply-side pressures rather than demand-driven factors, with core inflation remaining stable. The RBI's assessment suggests India's domestic fundamentals are holding firm even as external headwinds persist.