Blitz India Business
NEW DELHI:The defining number of the week is not a level but a spread. Retail inflation for July, published on Wednesday, came in at 4.45% — up marginally from June’s 4.38% and well inside the Reserve Bank’s band.
Wholesale inflation, published on Friday, came in at 9.78%, easing only fractionally from June’s 9.87%. A gap of 5.33 percentage points between the wholesale and retail indices is the single most important fact on any Indian corporate desk this morning, because it is a margin question before it is a monetary one. Producers are absorbing an energy shock that consumers are not paying for. Wholesale fuel and power inflation stood at 20.05% in July, down from 27.41% in June; manufactured products ran at 8.29% and primary articles at 8.52%. At retail, by contrast, electricity, gas and other household fuels rose 2.02%, and the operation of personal transport equipment 7.36%. Somewhere between those two sets of numbers sits a compression in gross margins that will show up in the September-quarter results, sector by sector, in proportion to pricing power.
The demand and output data give the other half of the picture, and they are strong. Industrial production grew 7.3% year on year in June, with the index at 123.1 against 114.7 — and the composition matters more than the headline.
Capital goods rose 14.2%, intermediate goods 9.3%, infrastructure and construction goods 7.5%, manufacturing overall 7.8%. Consumer durables at 7.7% comfortably outpaced consumer non-durables at 4.9%, which is the classic signature of an economy where the top of the income distribution is spending faster than the bottom — a pattern the CPI corroborates, with jewellery inflation running above 100% for silver and just under 33% for gold, diamond and platinum. Note also that this is the first full quarter on the revised IIP base of 2022-23, in place since 1 June, so year-on-year comparisons with older series should be handled with care.
Trade delivered the week’s cleanest good news. July merchandise exports reached $44.24 billion, the highest July on record and 19.63% up on a year earlier, beating the previous July peak of $38.34 billion set in 2022. Petroleum products led at $6.92 billion, up 67.64%, and electronic goods followed at $5.92 billion, up 57.4%. Imports rose 17.52% to $76.22 billion, leaving a merchandise deficit of $31.98 billion; the services surplus compressed the overall goods-and-services deficit to $15.03 billion, though that is still 31.5% wider than July 2025. Goods and services together crossed $80 billion for the month, at $80.14 billion, growing 13.31%. The direction of the import-export spread, not the monthly print, is the thing to track: a record export month and a wider deficit are not contradictory when crude is expensive and gold is being bought.
On the external account the Reserve Bank had a decisive week. Reserves rose $14.14 billion to $707.00 billion for the week ended 7 August — the sharpest weekly gain since the week ended 30 January — with foreign currency assets up $9.95 billion to $574.63 billion and gold up $4.00 billion to $108.74 billion. Reserves are now $15.89 billion above their end-March level and $13.38 billion above a year earlier. Then, on Friday, the RBI brought forward the closure of its special FCNR(B) swap window: opened on 8 June, it has drawn $52.3 billion of the $56.85 billion mobilised across all three channels, and will now cover only deposits raised to 31 August rather than 30 September, with banks able to swap until 11 September. The external commercial borrowing and overseas foreign currency borrowing windows remain open to 31 December. A central bank that shuts a successful facility early is telling the market it has enough. Equities were less sanguine: the Sensex ended the week at 78,009.25, down 490 points or 0.62%, the Nifty 50 at 24,366.00, down 205 points or 0.83%, and the Bank Nifty at 57,491.10, with oil and West Asian geopolitics cited as the drag.
Numbers of the Week
| Aankda / Metric | Vivarana (Details) |
|---|---|
| 4.45% / 9.78% | CPI and WPI inflation, July 2026, both provisional — a spread of 5.33 percentage points between the retail and wholesale indices |
| 20.05% | WPI fuel and power inflation, July 2026 — down from 27.41% in June, but the main source of the wholesale-retail wedge |
| 7.3% | IIP growth, June 2026, year on year (base 2022-23); capital goods 14.2%, intermediate goods 9.3%, manufacturing 7.8% |
| $44.24 bn | Merchandise exports, July 2026, up 19.63% — a record for the month; imports $76.22 bn, merchandise deficit $31.98 bn |
| $15.03 bn | Overall goods-and-services trade deficit, July 2026 — 31.5% wider year on year; total exports of goods and services $80.14 bn, up 13.31% |
| $707.00 bn | Forex reserves, week ended 7 August 2026 — up $14.14 bn; FCA $574.63 bn, gold $108.74 bn; sharpest weekly gain since 30 January |
| $52.3 bn | FCNR(B) deposits mobilised under the RBI swap window opened 8 June, of $56.85 bn across all three channels as of 13 August |
| 23.66 bn | UPI transactions, July 2026, worth ₹29.88 lakh crore — a record volume; 763 million payments and about ₹96,383 cr a day |
| 300.50 GW | Installed non-fossil power capacity as on 31 July 2026 (MNRE) — 54% of the ~552 GW total; 55.29 GW added in 2025-26 alone |
Markets of the Week
| Indicator | Close / level | Week change | Read |
|---|---|---|---|
| BSE Sensex | 78,009.25 | −490 pts (−0.62%) | Fourth straight session of caution into Friday; the index shed 70.71 points on 14 August alone |
| Nifty 50 | 24,366.00 | −205 pts (−0.83%) | Underperformed the Sensex; Friday’s fall of 29.85 points was the smallest of the week |
| Bank Nifty | 57,491.10 | — | Financials held up better than the broad market as reserve accretion eased rupee pressure |
| Forex reserves (wk to 7 Aug) | $707.00 bn | +$14.14 bn | Sharpest weekly gain since the week ended 30 January; foreign currency assets +$9.95 bn, gold +$4.00 bn |
| Repo rate | 5.25% | unchanged | Held on 5 August with a neutral stance; minutes due around 19 August, next review 5–7 October |