On Thursday, the Ministry of Finance released its Monthly Economic Report, forecasting that India’s gross domestic product will expand 7.3% in the July‑September quarter. The projection follows a slight deceleration from the 8.4% growth recorded in the June‑August period.
The report flags several headwinds. Oil prices surged in September, pushing global bond yields higher and tightening the risk appetite for emerging‑market debt.
India’s own bond yields rose by 0.5 percentage points, tightening the rupee’s funding costs. Analysts warn that a continued rise in yields could erode investor confidence and trigger capital outflows.
Developed economies are also vying for investment to support new manufacturing pushes, intensifying competition for capital. The ministry notes that foreign direct investment inflows are expected to improve this fiscal year, but capital may shift toward jurisdictions with lower risk premiums.
The Ministry will present the full set of data to the Parliament next week, while the Reserve Bank of India may adjust monetary policy to counter potential rupee volatility. Meanwhile, a small business owner in Delhi is bracing for a possible uptick in borrowing costs.