India’s economic activity showed signs of renewed strength in April, with the Moneycontrol Eco Pulse Index rising to 51.6, up from 49.2 in March, indicating a return to expansion territory despite continuing disruptions caused by the West Asia crisis. A reading above 50 signals economic expansion, suggesting that the economy regained momentum after experiencing a contraction in the previous month.

According to the latest Moneycontrol Eco Pulse report, the recovery was largely driven by stronger manufacturing activity, robust exports, and resilient domestic demand, particularly in rural areas. While global uncertainties and rising commodity prices continued to weigh on the economy, key indicators pointed to a broad-based improvement in business activity during the month.

Manufacturing and services remained major contributors to the recovery. The Manufacturing Purchasing Managers’ Index (PMI) rose to 54.7 in April, compared to 53.9 in March, while the Services PMI improved to 58.8 from 57.5. The Composite PMI, which combines both sectors, climbed to 58.2, reflecting sustained strength in private-sector activity despite external challenges.

Exports emerged as one of the strongest growth drivers during the month. Merchandise exports rebounded sharply, growing 13.8 percent in April after contracting 7.4 percent in March. Imports also returned to positive territory, rising 10 percent, highlighting improved trade activity and stronger economic demand.

Consumption trends remained supportive, although growth moderated in certain urban segments. Four-wheeler sales expanded by 11.6 percent, while two-wheeler sales increased by 13 percent. Although both categories recorded slower growth compared to March, tractor sales surged 24.5 percent, signalling healthy rural demand and continued resilience in the agricultural economy.

Financial activity also remained robust. Non-food credit growth stood at 16.3 percent, while UPI transaction volumes rose 24.9 percent, higher than the previous month’s growth of 23.7 percent. However, credit card payment growth slowed significantly to 0.7 percent, compared to 7.1 percent in March, indicating some softness in discretionary urban spending.

Infrastructure-related indicators showed gradual improvement. Core sector output growth increased to 1.7 percent, while electricity demand growth strengthened to 3.9 percent. Cargo movement through major ports also improved, reflecting steady industrial and trade activity.

The labour market presented a mixed picture. Urban unemployment eased slightly to 6.6 percent from 6.8 percent, while youth unemployment declined to 18 percent from 18.4 percent. However, the Naukri Job Speak Index slowed to 5.8 percent, suggesting that hiring activity in the formal job market may be moderating.

Inflation continued to be a concern during the month. Wholesale inflation accelerated sharply to 8.3 percent in April, up from 3.9 percent in March, largely due to higher commodity prices and supply chain disruptions linked to the ongoing geopolitical tensions in West Asia.

The report noted that while manufacturing, exports, and rural demand helped drive the economy back into expansion territory, certain indicators pointed to caution. Slower growth in e-way bill generation, weaker fuel consumption data, and softer urban spending patterns suggest that the recovery remains uneven across sectors.

Adding to the challenges, the government allowed a partial pass-through of higher crude oil prices, leading to fuel price increases of nearly ₹4 per litre for both petrol and diesel. Economists expect these higher fuel costs to gradually impact consumer spending and transportation expenses in the coming months. Concerns also remain over potential weather-related risks, including the impact of El Niño conditions on rural demand and agricultural output.

The April reading of the Moneycontrol Eco Pulse Index indicates that India’s economy has regained momentum after March’s slowdown, supported by strong manufacturing activity, export growth, and resilient rural consumption. However, rising inflation, geopolitical uncertainty, and signs of moderation in urban spending suggest that the growth trajectory will continue to face challenges in the months ahead.