How is India’s economy doing?

1 What is the rupee telling us?

A dollar cost ₹94.94 on 23 Oct 2026, 8.1% more than a year earlier. Against a basket of 64 currencies the rupee was 8.4% weaker than a year earlier in September 2026, and 6.0% weaker after allowing for the gap between Indian and foreign inflation.

Reserves stood at $721.0 billion on 16 Oct 2026, $18.7 billion more than a year earlier.

Foreign currency assets, the part of the reserves the RBI sells when it supports the rupee, jumped $47.5 billion in the single week to 4 Sep 2026. The RBI’s weekly figures do not say why. Since then they have fallen $56.3 billion, while a dollar came to cost 0.5% more in rupees. A rupee that holds steady while these assets fall is a sign that the RBI is selling dollars. It is a sign, not proof: the dollar value of the other currencies and bonds it holds moves too.

India buys most of its oil abroad. Brent crude cost $123 a barrel on 27 Oct 2026, 92.3% more than a year earlier. Because the rupee also fell, a barrel cost 106.9% more in rupees (at the latest exchange rate we have, for 23 Oct 2026).

2 Is inflation inside the RBI’s band, and what is driving it?

Consumer prices rose 5.5% in the year to September 2026, up from 2.7% in January 2026. That is inside the RBI's band of 2–6%, and above its 4% target.

Food and beverages, about 37% of the basket, rose 7.4%. Eating out rose 9.4%. Jewellery and watches rose 43.3%.

Fuel tells a different story. Petrol cost 7.5% more than a year earlier and diesel 8.4% more, while a barrel of crude cost 106.9% more in rupees. Pump prices in India are set mostly by the state-run oil companies and by taxes, and they have risen far less than crude.

Electricity, mostly generated from coal and priced by state regulators, cost 1.0% less than a year earlier.

India publishes no official “core” inflation, the measure without food and fuel that many central banks watch. We do not yet split the whole index into food, fuel and the rest: that needs the weights of each item in the basket, which we have not added yet.

3 Is growth reaching people?

The economy grew 7.8% in Apr–Jun 2026 after adjusting for prices, against 6.9% a year earlier.

Private consumption, the closest thing we have to a measure of whether growth reaches households, grew 7.1%. Investment grew 11.9%. Bank credit grew 18.2% in the year to 15 Oct 2026. Industrial production grew 6.7% in the year to September 2026.

There is no good monthly measure yet of whether growth reaches people: wages, rural spending and the like come late and patchily. These GDP figures are on MoSPI’s new 2022-23 base, first published in February 2026, and each quarter is revised several times. Industrial production is on its new 2022-23 base too.

4 Are jobs being created?

Unemployment was 5.0% in September 2026 for people aged 15 and over, against 5.2% a year earlier. Among 15 to 29-year-olds it was 15.2%.

Only 34.6% of women aged 15 and over were working or looking for work, against 55.5% of all adults.

Read these with care. The monthly survey began only in April 2025, so there is little history. It counts anyone who worked for at least an hour in the survey week as employed, so it says little about the quality of jobs. Moves of a few tenths of a point from month to month are mostly noise.