Page 16 - Policy Economic Report - Jan 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

According to the Periodic Labour Force Survey (PLFS), key labor indicators point to strengthening
employment conditions.

o The Labour Force Participation Rate (LFPR) for persons aged 15 years and above increased to
56.1% in December 2025.

o Female LFPR rose to 35.3%, indicating rising Participation and improving inclusion.
o The Worker Population Ratio (WPR) increased to 53.4%, reflecting steady employment

absorption.
o The unemployment rate declined to 4.8% in December 2025, continuing its downward trajectory.

• Trade Performance: Export Diversification and Services Strength
On the trade front, India’s total exports reached record levels of USD 825.3 billion in FY25 and USD 418.5
billion in H1 FY26, driven by strong growth in services exports and sustained momentum in nonpetroleum,
non-gems, and jewelry exports.

India’s integration into global trade continues to deepen, marked by diversification and strong services
led growth. India’s share in global merchandise exports increased from 1% in 2005 to 1.8% in 2024.
According to UNCTAD’s Trade and Development Report 2025, India ranks third among countries in the
Global South in terms of the diversity index of trade partnerships, following China and the UAE. India’s
index score of 3.2 exceeds that of all countries in the Global North, underscoring its resilience in the face
of tariff uncertainties and other emerging challenges.

Services exports emerged as a key growth engine, reaching an all-time high of USD 387.5 billion in FY25,
registering a robust 13.6% year-on-year growth. This performance reinforced India’s position as a global
hub for technology, business, and professional services, with rising demand across IT, financial, and
knowledge-intensive segments.

Foreign exchange reserves stood at USD 701.4 billion as of 16 January 2026, providing an import cover of
around 11 months and covering over 94% of external debt, thereby strengthening India’s capacity to
withstand external shocks. India also remained the world’s largest recipient of remittances, with inflows
reaching USD 135.4 billion in FY25, offering critical support to the current account.

• Industrial Output: IIP and Core Sector Performance

Industrial activity gathered further momentum in December 2025, with broad-based improvement
reflected across both the Index of Industrial Production (IIP) and the Index of Eight Core Industries (ICI).

The combined Index of Eight Core Industries (ICI) measures both the individual and aggregate
performance of production across eight key sectors viz. coal, crude oil, natural gas, refinery products,
fertilizers, steel, cement, and electricity. It serves as a leading indicator of industrial performance and
accounts for 40.27% of the total weight of the IIP.

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