GST cuts boosted Indian retail prices and household spend, offsetting tariff‑related hurts to exports, a report from HSBC Global Investment Research said on Tuesday.
The study shows India’s manufacturing output kept rising. New export orders fell, but domestic orders rose enough to balance the dip. A jump in input purchases suggests that factories may stay strong into November.
HSBC also projected growth for the third quarter of 2025 at about 7.2‑7.4 %. Agriculture, manufacturing, construction and spending in financial services all helped lift the economy this quarter.
Exports overall stayed flat even though the United States saw a drop. The decline in U.S. sales stemmed from lower demand for jewellery, crustaceans and textiles. However, shipments to other markets, and strong U.S. sales of parcels exempt from duties (like electronics and petroleum), kept overall export figures steady. High‑tech exports such as services also helped.
Key drivers of the positive trend include higher demand for durable goods, a surge in vehicle sales, and a fast‑growing e‑commerce market. Bank credit for industries and services, especially electronic manufacturing and retail trade, went up.
GST relief was announced on September 22 for around 375 items. The government’s own data shows that companies slashed prices more than the GST cuts truly justified on roughly half of the items watched.
Bhandari, HSBC’s Chief India Economist, said that even though U.S. exports fell 12 % year‑on‑year in September after a 25 % jump in the first half of the year, total exports stayed level thanks to new customers abroad and robust high‑tech and exempt‑category exports.
While the report warns that the second half of the fiscal year could slow a bit due to fiscal tightening, current indicators point to a firm, growing economy in September driven by robust performance across agriculture, manufacturing, construction and services.
Source: ianslive
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