Daijiworld Media Network - New Delhi

New Delhi, May 23: India’s economic activity showed continued resilience in April, with both industrial and services sectors maintaining steady momentum despite global headwinds, particularly ongoing uncertainty in West Asia, according to the Reserve Bank of India’s latest monthly bulletin released on Friday.

The bulletin noted that industrial production and services activity remained strong across multiple segments. It also pointed to early financial results from listed private non-financial companies for the fourth quarter of 2025–26, which indicated improved business performance compared to the previous quarter, with double-digit growth in both sales and operating profits.

In the agriculture sector, the report highlighted that rapid progress in summer sowing was supported by above-normal pre-monsoon rainfall and healthy reservoir levels. However, it cautioned that higher-than-usual minimum temperatures and unseasonal rainfall in some regions could affect the harvesting of remaining rabi crops.

The RBI also noted that India’s foodgrain stocks remain well above buffer norms, ensuring adequate domestic food security despite weather-related risks.

On capital flows, the bulletin observed that net foreign direct investment (FDI) remained positive for the second consecutive month in March. However, foreign portfolio investors (FPIs) continued to withdraw funds in April and May, although the pace of outflows has slowed.

Inflation trends showed consumer price inflation rising to 3.5 percent in April, mainly driven by food prices. Core inflation, however, remained stable, suggesting limited transmission of higher input costs into broader price levels.

The central bank emphasised that while headline inflation remains within the tolerance band, continued monitoring is necessary to assess potential price pressures in the coming months.

The report also underlined that geopolitical tensions in West Asia are continuing to impact global commodity markets, trade flows, and supply chains, adding volatility to financial markets worldwide.

Despite these external challenges, the RBI said India is entering this phase from a position of macroeconomic strength, with domestic demand remaining the primary driver of growth. It added that robust services exports, steady foreign direct investment inflows, strong foreign exchange reserves, and proactive policy measures by the government and the central bank are expected to help cushion the economy against external shocks.

However, the bulletin cautioned that crude oil price fluctuations, financial market conditions, and capital flow volatility continue to pose risks to the external sector outlook in the near term.