India's Economic Activity Index Reaches 51.6 in April on Exports and Manufacturing Growth

India's Economy Shows Signs of Recovery in April

India's economy performed better in April, with the Moneycontrol Eco Pulse Index rising to 51.6 from 49.2 in the previous month, despite disruptions from the West Asia crisis continuing for yet another month.

A reading above 50 signals expansion, indicating that economic momentum recovered after March's contraction as manufacturing, exports, and parts of domestic consumption continued to support activity. The recovery was led by an improvement in business activity, with the Manufacturing PMI rising to 54.7 in April from 53.9 in March.

Key Indicators

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Exports provided a major boost after March's weakness, with merchandise exports growing 13.8 percent in April, compared with a contraction of 7.4 percent in the previous month. Consumption indicators remained supportive, although momentum moderated in some segments.

Financial activity stayed firm, with non-food credit growing 16.3 percent, while UPI volumes rose 24.9 percent, higher than 23.7 percent in March. However, credit card payments slowed sharply to 0.7 percent from 7.1 percent, indicating some softness in discretionary urban spending.

Infrastructure indicators showed only a modest improvement, with core sector output rising 1.7 percent in April, compared with 1.2 percent in March. Labour market indicators were mixed, with urban unemployment easing to 6.6 percent from 6.8 percent, while youth unemployment declined to 18 percent from 18.4 percent.

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Inflation remained a key pressure point, with wholesale inflation accelerating to 8.3 percent in April from 3.9 percent in March, reflecting the impact of higher commodity prices and supply disruptions linked to the West Asia crisis.

The April reading suggests that India's economy regained momentum after March's contraction, but the recovery remains uneven. Manufacturing, exports, and rural demand supported the index, while softer credit card spending, slower e-way bill growth, and weak fuel indicators pointed to areas of caution.

The government allowed some pass-through of crude prices, with pump prices rising by nearly Rs 4 for both diesel and petrol. Adverse weather conditions, such as El Niño, may hamper rural consumption.

The Moneycontrol Eco Pulse tracks high-frequency indicators across consumption, manufacturing, labour markets, trade, and financial activity to provide an early monthly snapshot of India's economic momentum ahead of official GDP releases.