ICRA Insight

January 2026

Foreword

We are pleased to present the January 2026 edition of ICRA Insights, continuing our commitment to delivering timely, research-driven perspectives on India’s dynamic macroeconomic and sectoral landscape.

This month’s Monthly Macro Wrap highlights November’s IIP growth rebounding on normalised factory operations and post-festive restocking, even as October–November averages remain steady. Key themes include the sustained impact of GST rationalisation, export performance amid pending trade negotiations, and evolving Government capex priorities. The GDP growth for FY2026 is projected at 7.4%, supported by easing inflation and expectations of a monetary policy pause in February.

In our Spotlight on CSR, we showcase our partnership with VIDYA India Bengaluru, reinforcing our belief that compassion and collaboration can empower communities and create lasting change.

The Research Recap covers trends such as fiscal deficit widening to 62% of the annual target, robust airline traffic growth, and sectoral insights spanning credit risk frameworks and capitalisation norms.

This edition also features webinar details, rating updates, methodologies, media coverage, and our latest podcast by Ms. Madhura Nejjur on implications of Mexico’s 2026 tariff shift. We hope you find this edition insightful and wish you a successful and fulfilling year ahead!

K. Ravichandran

Chief Ratings Officer, ICRA Limited

Aditi Nayar

Chief Economist, ICRA Limited

Monthly Macro Wrap

November’s IIP growth surpassed expectations, supported by normalised factory working days and post-festive restocking after GST rationalisation. However, October-November averages remain steady compared to Q2 FY2026. Key trends to watch include the sustained impact of GST, export performance amid the pending US trade deal, and the Government’s capex allocations. Wishing everyone a happy and prosperous 2026!

Listen to the podcast

Spotlight
on CSR

Waves of Warmth Spread

This festive season, we partnered with VIDYA India Bengaluru to celebrate giving and empowerment. Through compassion and collaboration, we continue building bridges of hope, creating opportunities, and shaping a future where every dream matters. Click here to know more!

Research Recap

Economic Outlook and Macro Trends

ICRA’s review of October-November 2025 shows mixed trends: eight of 18 indicators improved YoY, aided by festive demand, while 10 weakened due to rains and the US tariffs. The GDP growth is projected at 7.4% in FY2026, with inflation easing and the MPC likely pausing in February.

Fiscal deficit reached 62% of target

The GoI’s revenue deficit stayed flat at ₹3.6 trillion in Apr-Nov FY2026, while capex surged to ₹6.6 trillion from ₹5.1 trillion last year. Consequently, fiscal deficit widened to ₹9.8 trillion, despite higher non-debt capital receipts.

Airlines

Domestic air passenger traffic rose 8.4% YoY to 154.5 lakh in November 2025, with capacity up 4.6%. For Apr-Nov FY2026, traffic reached 1,096.5 lakh (+2.2% YoY), while international traffic grew 9.0% YoY to 205.5 lakh.