The latest data suggest that India’s industrial sector has strengthened significantly in recent months, underlining that any disruption from the introduction of the GST in mid-2017 was short-lived. Industrial production growth rose to a two-year high of 8.4% y/y in November. In addition, the manufacturing PMI reading for December rose to a five-year high. Prospects for industry look bright over the near term. If nothing else, IP growth in y/y terms will receive a statistical boost due to the weakness caused by demonetisation in the early stages of 2017 setting up a fairly weak base for comparison. But underlying momentum in industry looks set to strengthen in any case. Once fully bedded in, the GST should help local manufacturers by simplifying the tax system and facilitating domestic trade.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services