Indian Economy Records Strong 8.2% GDP Growth
India's economy registered a significant 8.2% growth in the second quarter of 2025-26 (July-September), surpassing expectations and reinforcing its status as the fastest-growing major economy globally. This impressive performance follows a 7.8% growth in the first quarter, bringing the average GDP growth for the first half of the fiscal year to 8%. Prime Minister Narendra Modi welcomed these figures, attributing them to pro-growth policies, reforms, and the hard work of the Indian populace. Economists have largely upgraded their full-year FY26 GDP growth forecasts to around 7.5% in response to this robust showing, citing strong Q2 data, improving credit trends, and potential benefits from trade deals.
RBI Monetary Policy Committee to Convene Amidst Rate Cut Speculation
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) is scheduled to meet from December 3-5, 2025, to decide on the benchmark lending rate. While some experts anticipate a 25 basis point (bps) rate cut due to subdued inflationary pressures, which have remained below the 2% lower band mandated by the government for two consecutive months, others believe the central bank will likely maintain a pause, considering the better-than-expected GDP growth. SBI Research, for instance, suggests that the strong Q2 growth print and evolving economic conditions favor a pause in December's policy. The RBI had previously kept the repo rate steady at 5.5% in October.
Government Pushes for Economic Reforms in Parliament's Winter Session
The Indian Parliament's Winter Session, commencing December 1, 2025, will address a crucial economic agenda. Finance Minister Nirmala Sitharaman is set to introduce two significant tax-related proposals: The Central Excise (Amendment) Bill, 2025, and The Health Security cum National Security Cess Bill, 2025. These bills aim to replace the existing GST compensation cess on tobacco and pan masala with new levies. Another major reform is the Securities Markets Code Bill, 2025, which proposes to consolidate three separate laws governing India's capital markets into a single unified code to enhance compliance and ease of doing business. Additionally, there are plans to raise the foreign direct investment (FDI) cap in the insurance sector from 74% to 100%.
Indian Exports to US Decline Due to High Tariffs
India's exports to the United States, its largest overseas market, have experienced a sharp decline of 28.5% over the last five months (May to October 2025). This downturn is attributed to steep tariff hikes imposed by Washington, which escalated from 10% in April to 50% by late August, making Indian goods among the most heavily taxed of any US trading partner. Labour-intensive sectors such as gems and jewellery, textiles, garments, chemicals, and seafood were particularly affected, with chemical exports tumbling 38%. However, the International Monetary Fund (IMF) noted that the reform of the Goods and Services Tax (GST) and the resulting reduction in the effective rate are expected to help cushion the adverse impact of these tariffs.
RBI Imposes Penalty on HDFC Bank, Consolidates Master Directions
The Reserve Bank of India (RBI) has imposed a penalty of Rs 91 lakh on HDFC Bank for deficiencies in statutory and regulatory compliances. These non-compliances include violations related to interest rates on advances, guidelines on managing risks in outsourcing financial services, and failure to properly meet Know Your Customer (KYC) norms. In a separate move to reduce the compliance burden on Regulated Entities (REs), the RBI issued 244 consolidated Master Directions (MDs) on November 28, 2025. This exercise involved reviewing approximately 3500 existing directions, circulars, and guidelines.
NTT DATA to Reskill Indian Workforce in AI
In a significant development for India's technology sector, NTT DATA announced its plan to reskill all its over 40,000 employees in India to become "AI-native developers." This initiative aims to leverage India's vast engineering talent pool to scale Generative AI capabilities globally, highlighting the country's growing importance as an AI innovation hub.
FPIs Withdraw from Indian Equities in November
Foreign Portfolio Investors (FPIs) withdrew a net amount of Rs 3,765 crore from Indian equities in November 2025. This marks a reversal from October's inflows and was influenced by global risk-off sentiment, instability in global technology stocks, and a preference for primary over secondary markets. Despite domestic economic stability, high valuations and weak industrial indicators contributed to this cautious approach.
Upcoming Economic Indicators and Market Influences
The week ahead is expected to be event-heavy, with several key macroeconomic data announcements influencing stock market movements. India’s industrial production data for October 2025 and November automobile sales data are scheduled for release on December 1, 2025. These figures will provide valuable insights into festive-season demand and shifting consumption trends. Furthermore, changes impacting daily finances from December 1st include potential revisions in LPG and Air Turbine Fuel (ATF) prices, and a list of 17 bank holidays throughout the month.