India’s economy has begun the third quarter of FY26 with solid momentum, according to several high-frequency indicators. Despite global headwinds and domestic challenges, signs of healthy growth are emerging across consumption, manufacturing and digital payments.
Consumption and GST Collections Holding Up
Goods and Services Tax (GST) collections rose by about 4.6 % year-on-year in October, reaching approximately ₹1.96 lakh crore, and hovering near the ₹2-lakh-crore mark for the fourth time in the past seven months. This performance is a positive signal that domestic demand remains resilient, even after recent tax rate adjustments. Analysts note that the strong festive season and improved compliance have contributed to the outcome.
Manufacturing Activity Gaining Pace
On the industrial front, the HSBC Manufacturing PMI climbed to 59.2 in October, up from 57.7 in the previous month — underscoring renewed strength in output, new orders and employment. This sustained momentum suggests that both domestic and export-oriented manufacturing firms are responding positively to recent reforms and market demand.
What This Means for Investors and Advisors
For investors, fund-managers and financial advisors, the early signs from Q3 FY26 are encouraging:
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Strong consumption and industrial indicators reinforce India’s growth-driven investment themes.
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Sectors linked to domestic demand – such as consumer goods, durable goods, manufacturing and logistics may be better positioned in the near term.
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However, while trends are positive, markets should still account for global risk factors, policy execution and valuation discipline.
Strategic Outlook & Key Considerations
While India’s economic indicators point to a strong start to the third quarter, several factors warrant close attention. The key question is whether the current momentum in consumption and industrial activity can be sustained through the remainder of the quarter, especially as festive demand tapers off. External challenges including global trade tensions, commodity price fluctuations, and a potential slowdown in major economies could also test India’s resilience. Additionally, maintaining this growth trajectory will require continued reform-driven investments and a strong push in infrastructure development to translate short-term gains into long-term, sustainable expansion.
Source: MoneyControl