Core Viewpoint - India's Consumer Price Index (CPI) rose by 0.71% year-on-year in November, rebounding from a historical low of 0.25% in October, yet remaining below the Reserve Bank of India's (RBI) lower tolerance threshold of 2% for the third consecutive month [1] Group 1: Inflation Trends - The inflation level has shown a rebound, but it continues to stay below the RBI's target [1] - Food prices have continued to decline year-on-year, with the decrease narrowing to 3.91% in November [1] - The decline in food prices is primarily driven by lower costs in categories such as vegetables, pulses, and spices [1] Group 2: Tax Impact - Overall commodity inflation has remained low since the adjustment of the Goods and Services Tax (GST) rate in September [1]

Core Insights - India's September PMI index has declined from August's peak, influenced by a 50% tariff imposed by the US on Indian exports, leading to the slowest growth in new export orders in six months, while domestic new orders have increased [1][3] Group 1: PMI Performance - The composite PMI output index for India in September is at 61.9, down from August's final value of 63.2 [1] - The services PMI business activity index for September is at 61.6, compared to August's final value of 62.9 [1] - The manufacturing PMI output index for September is at 62.7, down from August's final value of 63.7, while the manufacturing PMI index itself is at 58.5, down from August's 59.3 [1][3] Group 2: Sectoral Trends - There is a divergence between services and manufacturing sectors, with services growth slowing to the lowest level in six months, while manufacturing growth has accelerated [3] - Despite a continued increase in private sector employment at the end of Q2, the pace of expansion has slowed compared to August, with both manufacturing and services growth rates declining [3] Group 3: Cost Pressures and Inflation - Significant cost pressures remain in the services sector, contrasting with the recovery in manufacturing, with reports of rising prices for cotton, electronic components, oil, steel, vegetables, and timber [3] - In September, the increase in manufacturers' selling prices outpaced that of service providers, with the slowdown in the services economy lowering the overall inflation rate [4] Group 4: Future Outlook and Tax Changes - Private sector assessments of future output are very optimistic, with overall confidence levels rising to a seven-month high, partly due to the reduction in Goods and Services Tax (GST) [4] - The GST council has implemented a simplified two-tier tax structure, effective September 22, with the basic tax rate reduced to 5% and 18%, and some essential goods and services seeing tax reductions or exemptions, which is expected to stimulate consumption [4]

Core Insights - India's Goods and Services Tax (GST) total revenue for July reached 1.96 trillion Indian Rupees, reflecting a year-on-year growth of 7.5% [1] Group 1 - The total GST revenue indicates a stable growth trend in India's tax collection system [1] - The 7.5% increase in revenue suggests a positive economic environment and consumer spending [1]