New Delhi | December 17, 2025 :
India’s private sector activity slowed to a 10-month low in December 2025, reflecting weakening demand and stalled hiring, even as the Reserve Bank of India (RBI) stepped up currency market interventions to stem a sharp fall in the rupee, according to the latest Purchasing Managers’ Index (PMI) data.
The PMI figures showed that growth momentum moderated across manufacturing and services, with firms turning cautious on recruitment amid rising input costs and global uncertainty. Economists said the slowdown highlights growing pressure on India’s economic recovery as external headwinds intensify.
RBI Intervenes as Rupee Hits Record Lows
At the same time, the RBI conducted aggressive interventions in the foreign exchange market after the rupee slid to record lows for four consecutive trading sessions. The currency has depreciated 5.95% so far this year, making it the worst-performing currency in Asia in 2025.
Traders said the rupee’s weakness was driven by sustained foreign portfolio investor (FPI) outflows, a stronger US dollar, and rising concerns over US–India trade tensions following policy shifts under the new US administration.
The RBI’s intervention strategy, market participants noted, appears focused on smoothing volatility rather than defending a specific level, while ensuring that foreign exchange reserves are not depleted excessively.
Policy Challenges Ahead
The twin developments underline broader challenges for India’s economy, with policymakers balancing growth concerns against currency stability. Finance Ministry officials have reiterated confidence in India’s macroeconomic fundamentals, while closely monitoring global trade developments and capital flows.
Analysts said upcoming data on inflation, exports, and global monetary policy will be crucial in determining whether private sector momentum rebounds in early 2026 or remains under pressure amid prolonged global uncertainty.
