India: Here comes the sun, here comes the rain: Frequently asked questions

Research evidence excerpt

India: Here comes the sun, here comes the rain: Frequently asked questions

25 June 2026

India: Here comes the sun, EconomicsIndia

here comes the rain

Frequently asked questions

◆ Amid falling oil prices but rising El Niño risks, we forecast a Pranjul Bhandari

slightly improved growth-inflation mix, but challenges remain ChiefThe HongkongIndia Economist/Strategist,and Shanghai BankingASEANCorporationEconomist

Limited, Singapore Branch

◆ The FX package will likely push the BoP into surplus, pranjul.bhandari@hsbc.com.sg

+65 6658 4976

supporting the INR, and easing domestic financial conditions

Aayushi Chaudhary

Economist, India, Indonesia & Sri Lanka

◆ We forecast rate hikes, but expect a shallow cycle; and some HSBC Securities and Capital Markets (India) Private

Limited

fiscal slippage, but not a one-for-one rise in borrowing aayushi.chaudhary@hsbc.co.in

+91 22 2268 5543

Priya Mehrishi

How resilient has activity been to the energy shock? Growth has slowed since the Associate Economist

year began, but sectors diverge. Manufacturing and exports remained resilient as firms HSBC Securities and Capital Markets (India) Private

front-loaded production. Lower US tariffs created a window to boost exports ahead of priya.mehrishi@hsbc.co.in

possible Section 301 tariffs, while energy uncertainty drove inventory builds. In contrast, +91 97391 69567

trade, transport and construction weakened amid higher energy costs.

Which sectors will be resilient, which not? Falling oil prices and easier financial

conditions (led by the RBI’s FX package) should lift FY27 GDP growth to 6.3% (6%

earlier). Risks remain from El Niño-driven heatwaves hurting food output. The informal

sector may suffer most, while the formal sector stays relatively resilient, supported by