India's Economic Surge and Key Developments
India's economy demonstrated remarkable resilience in the second quarter of the current financial year, posting a stunning growth rate of 8.2%. This performance, recorded for the July-September period, represents a six-quarter high and significantly exceeded projections from both the Reserve Bank of India and leading economists.
Economic Momentum and Monetary Policy Implications
The substantial GDP surprise has shifted expectations for monetary policy, with economists now anticipating reduced chances of an interest rate cut in the upcoming December policy review. The central bank is expected to revise its full-year growth projection upward from the current 6.8%, with many analysts now optimistic about 7%-plus growth for the entire fiscal year. Further momentum is anticipated in the third quarter, boosted by recent goods and services tax (GST) reductions.
Currency Challenges and International Recognition
The Indian rupee has faced significant pressure since July, depreciating sharply due to tariff-related concerns and foreign investor outflows. Currently trading around 89.3 per US dollar, analysts predict it may breach the psychological barrier of 90 by year-end. The currency's managed decline prompted the International Monetary Fund (IMF) to reclassify India's foreign exchange regime from "stabilized" to "crawl-like," noting the rupee's movement within a narrow margin relative to a statistically identified trend.
Emerging Markets Ranking Shift
India slipped to third position in Mint's Emerging Market Tracker for October, behind Indonesia and China. This decline was primarily driven by a sharp 11.8% year-on-year contraction in exports, among the weakest performances in emerging markets. Meanwhile, Indonesia surged to the top ranking from seventh place the previous month, buoyed by strong export momentum and improving manufacturing activity.
Major Investments and Strategic Initiatives
Several significant investment announcements marked the week, including a ₹7,280 crore scheme approved by the Union cabinet to promote manufacturing of rare earth permanent magnets. This initiative aims to make India self-reliant in rare earth magnet production within three to four years, reducing dependence on China.
In the technology sector, a Reliance Industries Ltd joint venture and Larsen & Toubro announced plans to invest $13.5 billion in data centres to meet growing demand from artificial intelligence applications. This brings total data centre investment announcements this year to nearly $60 billion.
Additional notable developments include a potential $2.8 billion uranium export agreement between Canada and India, and the Supreme Court's approval of a ₹5,100 crore settlement in a bank fraud case involving Sterling Biotech promoters.
Environmental and Employment Trends
Despite the National Clean Air Programme's goal to reduce particulate matter concentration by 40% by 2026, progress remains limited. Latest data shows only 49% of targeted cities (64 of 130) have achieved a 20% or more reduction in PM10 levels between FY18 and FY25, with just one in five cities meeting the programme's ambitious 40% reduction target.
Employment data revealed that the estimated number of workers in unincorporated sector enterprises stood at 128.6 million in July-September, steady from the previous quarter but down 2.1% from January-March. The trend showed a reversal between rural and urban areas, with urban employment increasing while rural numbers declined.
Legislative Agenda
Parliament's upcoming winter session, beginning December 1, 2025, is expected to consider 10 new bills, including the Jan Vishwas Amendment Bill and the Insolvency and Bankruptcy Code (IBC) Amendment Bill, both returning for approval after committee review.
