The last several days have highlighted precisely what a roller coaster of a ride India’s economic indicators can take. The strong Q2 GDP growth last Friday, which reached a six-quarter high of 8.2%, cheered up the government and its supporters. This sentiment was not diminished by the IMF's relatively low nominal growth rate and grade. However, the new figures on the Index of Industrial Production (IIP) and, to some extent, the manufacturing PMI are expected to do more in that regard. In October 2025, the IIP's growth reached a 14-month low of just 0.4%. The IIP revealed that the manufacturing sector had slowed to a 14-month low of 1.8% in October, despite the GDP figures for the July–September quarter showing the sector rising 9.1%..

The effects of US tariffs are the other, more concerning factor. Merchandise shipments surged in September, the first full month of 50% tariffs, as previous orders were being fulfilled. They then contracted nearly 12% in October as the tariffs began to weigh on new order selections. The PMI statistics, too, indicated that the score for India’s manufacturing sector stayed at a nine-month low of 56.6 in November. Another indication that the U.S. tariffs were affecting was that new export orders increased at their slowest rate in more over a year, according to the study.

While decreased exports certainly weighed on the manufacturing sector, the change in weather towards winter and extended rains pulled down the electrical and mining industries, respectively. Consequently, the primary goods sector shrank in October. According to the GDP data, investment increased by a respectably robust 7.3% in Q2. However, the IIP figures suggest growth could have stalled in the beginning of Q3 with the capital goods sector rising at a 14-month low of 2.4%. The IIP numbers also carry some worrying news regarding household consumption.

Private Final Consumption Expenditure increased by about 8% in Q2, according to GDP figures. The consumer durables and non-durables sectors, however, had a decline in October, according to the IIP, which was their worst overall performance in two years. After the GST rate was rationalized, this was the first complete month of data. Demand did not come in as quickly as the government would have preferred, as evidenced by the GST income of ₹1.7 lakh crore in November, which reflects economic activity in October. When combined, a number of early indicators suggest that Q3 is not likely to be a happy quarter for the economy.