Page 19 - Policy Economic Report - April 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

India PMI

HSBC India Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 58.3 in April
2026 from 57.0 in March, indicating a strong expansion in private sector activity. A PMI reading above 50
signals expansion. The upturn reflects a rebound in economic momentum at the start of the new fiscal
year, supported by robust domestic demand across both manufacturing and services sectors.

India’s manufacturing activity strengthened in April, with the manufacturing PMI rising to 55.9, driven by
a sharp increase in output and new orders. Production levels expanded significantly, with firms responding
to strong domestic demand conditions. However, export demand remained relatively subdued, with
growth in new export orders lagging behind domestic orders, reflecting continued weakness in external
demand.

The services sector also recorded steady expansion, with the PMI rising to 57.9, supported by resilient
domestic consumption and improved business activity. Despite the continued growth, firms reported
some moderation in business confidence amid rising cost pressures and uncertain global conditions.

Input cost inflation, while easing slightly compared to March, remained elevated, driven by higher prices
of raw materials and fuel. Firms continued to pass on part of these costs to customers, although the
increase in output prices was relatively moderate compared to input cost pressures.

Employment conditions improved, with job creation reaching a 10-month high, reflecting increased hiring
to meet rising demand. However, the pace of employment growth remained cautious, with firms
continuing to adopt a measured approach to workforce expansion.

India’s external position

India’s forex reserves

India’s foreign exchange reserves increased by $3.825 billion to $700.946 billion in the week ended April
10, 2026, according to data released by the Reserve Bank of India. This follows a sharp increase of $9.063
billion in the previous week, when reserves stood at $697.121 billion. The reserves had earlier touched an
all-time high of $728.494 billion in the week ended February 27, before moderating in subsequent weeks
due to pressure on the rupee amid the Middle East conflict, which also prompted intervention by the RBI
through dollar sales.

Composition of Reserves

• Foreign Currency Assets (FCA): Increased by $3.127 billion to $555.983 billion
o Remains the largest component of reserves
o Includes valuation effects from movements in major currencies such as the euro, pound,
and yen

• Gold Reserves: Increased by $601 million to $121.343 billion
• Special Drawing Rights (SDRs): Increased by $56 million to $18.763 billion
• Reserve Position with IMF: Increased by $41 million to $4.857 billion

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