India’s business activity index reached 103.4 in July, up from 103.3 in June. A reading above 100 means the economy is expanding faster than its long‑term average.
The July figure suggests that the recovery seen in June largely held, but the momentum was uneven. The index had jumped sharply in June after a dip in April and May, and its small rise in July keeps it in the above‑trend zone.
However, the data also tells a mixed story. High‑frequency measures of fuel consumption, mobility and coal improved, while survey‑based PMI indicators slowed. PMI manufacturing fell to 53.5 from 54.2, PMI services dropped to 53.3 from 57.4, and the composite PMI slipped to 54.3 from 57.1.
Fuel and rural demand helped cushion the slowdown. Petrol consumption grew 9.2% versus 7.4% in June, and diesel rose 9.9% versus 6.2%. Diesel demand is a key proxy for transport, logistics and industry. Tractor sales increased 36% versus 35.5%, coal production jumped 8.4% versus a 0.6% contraction, and coal offtake surged 18.3% versus 6.7%.
Mobility indicators showed varied performance. Two‑wheeler sales rose 34.1% versus 26.8%, three‑wheeler registrations climbed 59.8% versus 57.2%, but four‑wheeler sales slowed to 25.5% from 37.2%.
Labour and logistics signs were weaker. The Naukri JobSpeak Index grew 5% versus 6.1%, and e‑way bill generation fell sharply to 6% from 14.5%.
Financial activity remained steady. Credit card payments grew 3.6%, matching June, while non‑food credit growth stayed strong at 17.4%. UPI volume growth eased to 21.5% from 23.5%.
Overall, July points to a consolidation phase after June’s sharp improvement. The index stayed above 103 for two months, but the marginal rise shows that acceleration has moderated.
The data offers a positive start to the second quarter, but with caveats. Growth remains above trend thanks to domestic demand, fuel, rural activity and energy indicators. Yet the decline in PMI and logistics metrics suggests that expansion may stay uneven. Continued strength in fuel, coal and rural demand could cushion the slowdown, while persistent weakness could keep the economy in an uneven above‑trend phase.
The business activity index is a composite of 18 high‑frequency indicators covering consumption, mobility, finance, labour and industry. It is released around the 10th of each month, ahead of a broader pulse indicator released near the 22nd.