Page 16 - Policy Economic Report - July 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

• Top five major states with high Year on Year inflation for the month of June, 2025 are shown in
the graph below.

Figure 9: Top five major states with high Year on Year inflation for the month of June, 2025

Source- NSO

Repo Rate reduction-

• Policy repo rate is being reduced by 50 basis points (bps) to 5.50 per cent with immediate effect.
• There will be consequent adjustment of the Standing Deposit Facility (SDF) rate under the

Liquidity Adjustment Facility (LAF) to 5.25 per cent and of the Marginal Standing Facility (MSF)
rate and the Bank Rate to 5.75 per cent.
• RBI expects to attain the objective of achieving the medium-term target for consumer price index
(CPI) inflation of 4 per cent within a band of +/- 2 per cent, while stepping up growth momentum.

Manufacturing PMI – India

• The HSBC Flash India Manufacturing PMI reached 59.2 in July 2025, its highest level in nearly 17.5
years, according to PMI data released by S&P Global. This surge, up from 58.4 in June, signals robust
growth in the manufacturing sector, driven by strong domestic and global demand.

• Composite PMI reached 60.7, the fastest upturn in over a year, driven by buoyant demand,
technological investments, and expanded capacities. There is a firm pick-up in employment, especially
in the service sector, suggesting healthy job creation accompanies the expansion of both India's
manufacturing and service sectors.

• Indian companies remained optimistic about output growth over the next 12-month and monitored
companies attributed growth to buoyant demand, investment in technology and expanded capacities.

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