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* Preliminary estimates indicate that India’s EAI-GVA growth moderated to 7.0% YoY in Jul’26 from 7.6% YoY in Jun’26, reflecting a sequential easing in industrial and services activity. Industrial activity remained the strongest contributor, growing 9.4% YoY in Jul’26 vs. 10.9% YoY in Jun’26, while services growth moderated to 6.9% YoY from 7.4% YoY. Agricultural activity, however, improved to 0.9% YoY from -1.2% YoY, although it remained constrained by persistent weather-related pressures. Consequently, non-farm EAI-GVA growth moderated to 7.7% YoY in Jul’26 from 8.6% YoY in Jun’26. Notably, EAI-GVA averaged 7.6% YoY during Apr-Jul’26.

* EAI-GDP growth accelerated to 11.9% YoY in Jul’26 from 9.9% YoY in Jun’26, supported by resilient domestic demand and an improved external balance. Consumption remained robust at 11.9% YoY in Jul’26 vs. 14.5% YoY in Jun’26, supported by strong auto sales, petrol consumption, and personal credit, although revenue spending, rural wages, and consumer durables moderated. Investment activity also remained strong at 11.7% YoY in Jul’26 vs. 12.2% YoY in Jun’26, aided by robust auto sales, cargo traffic, cement production, industrial credit, and government capex. On the external front, real exports strengthened to 21.3% YoY in Jul’26 from 16.2% YoY in Jun’26, while real imports moderated to 19.1% YoY from 31.8% YoY, significantly narrowing the drag from net exports.

* High-frequency indicators point to resilient economic activity in Aug’26. PV sales remained strong at 38.9% YoY in Aug’26, while CV sales accelerated to 44.4% YoY, indicating continued resilience in domestic demand. Services PMI improved to 54.5 in Aug’26 from 53.1 in Jul’26, while manufacturing PMI moderated to 52.8 from 53.5, with both remaining in expansionary territory. FX reserves strengthened to USD729.3b in Aug’26 from USD692.9b in Jul’26. However, registered motor vehicle sales growth moderated to 17.2% YoY in Jul’26 (still a double-digit growth) from 27.5% in Jun’26, while reservoir levels remained weak (-35.9% YoY), highlighting continued weather-related risks.

* Our EAI-GVA suggests that economic activity remained robust through the start of 2QFY27, with EAI-GVA growth averaging 7.6% YoY during Apr-Jul’26, including 7.0% YoY in Jul’26. The stronger-than-expected 1QFY27 GDP print (7.8% vs. our exp. of 7.2%), along with resilient high-frequency indicators in Jul-Aug’26, provides an upside to our FY27 growth outlook. We now expect real GDP growth at 7.0-7.2% in FY27, compared with our earlier expectation of 6.8-7.0% and the RBI’s 6.7% forecast. Strong investment and consumption activity, healthy manufacturing and services growth, robust credit, and sustained government infrastructure spending continue to underpin domestic activity, while improving monsoon conditions should provide further support to rural demand. Overall, the broad-based resilience in economic activity suggests that the economy has entered 2QFY27 on a firm footing. However, global trade uncertainty, geopolitical risks, and the evolution of El Niño remain key risks to the outlook. We peg nominal GDP growth at around 13% in FY27.

* The stronger growth outlook makes the monetary policy path increasingly relevant. An Oct'26 rate hike remains a possibility if growth and inflation continue to surprise on the upside, although we expect the RBI to remain cautious initially and potentially prepare the ground for a Dec'26 hike. We do see a possibility of 50bp rate hike by Feb’26, along with liquidity management tools to draw down excess liquidity.

* EAI-GVA growth moderated to 7% in Jul’26: Preliminary estimates indicate that India’s EAI-GVA growth moderated to 7.0% YoY in Jul’26 from 7.6% YoY in Jun’26, reflecting a sequential easing in industrial and services activity. Industrial activity remained the strongest contributor, growing 9.4% YoY in Jul’26 vs. 10.9% YoY in Jun’26, while services growth moderated to 6.9% YoY from 7.4% YoY. Agricultural activity, however, improved to 0.9% YoY from -1.2% YoY, although it remained constrained by persistent weather-related pressures. Consequently, non-farm EAI-GVA growth moderated to 7.7% YoY in Jul’26 from 8.6% YoY in Jun’26, indicating that underlying economic activity remained resilient despite some loss of momentum. (Exhibits 1 and 2).

* EAI-GDP growth accelerated to 11.9% YoY in Jul’26 from 9.9% YoY in Jun’26, supported by resilient domestic demand and an improved external balance. Consumption remained robust at 11.9% YoY in Jul’26 vs. 14.5% YoY in Jun’26, supported by strong auto sales, petrol consumption, and personal credit, although revenue spending, rural wages, and consumer durables moderated. Investment activity also remained strong at 11.7% YoY in Jul’26 vs. 12.2% YoY in Jun’26, aided by robust auto sales, cargo traffic, cement production, industrial credit, and government capex. On the external front, real exports strengthened to 21.3% YoY in Jul’26 from 16.2% YoY in Jun’26, while real imports moderated to 19.1% YoY from 31.8% YoY, significantly narrowing the drag from net exports. (Exhibits 3 and 4).

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