National Market Trends Teaser

Editor: Lisa Saller, Lisa Saller

The domestic and international business environment adversely impacted the performance of the Indian industry in terms of its growth during 2011–12 to 2013–14. Weak international demand caused by global economic slowdown and recession in Euro area, sluggish domestic demand, high financing cost, subdued investment, depreciating currency (Indian Rupee), infrastructural constraints, regulatory and procedural impediments slackened Indian industry’s growth performance during the said period.

A decline in the production of capital goods during 2011–12 to 2013–14 was indicative of investment weakness in those years. Additionally, weakening of the INR made the imports costlier with adverse impacts on the operating profit of the companies. This also led to higher interest payment in Rupee terms on foreign loan with adverse impact on the net profit. However, stability in the exchange rate during a later period proved to have a positive impact on industrial performance. Furthermore, the external demand scenario as guided by pace of economic recovery in the Euro area and China's economic slow-down is another factor to determine the sustainability of India's industrial recovery. Reports from the Reserve Bank of India, Central Statistics Office (CSO), Ministry of Statistics and Programme and websites of several central banks speak on the ongoing trends and growth in the Indian sector. An overview of the Indian industry and the growth trends can be found in the following report (English language only).