Insights from Peripheral Vision, May 2024

As we move past the initial months of the new financial year, our May 2024 edition of Peripheral Vision highlights three major areas of developments that require attention:

• India's core sector growth rate declined due to lower crude oil production and contractions in refinery products and fertilisers.

• Despite a slowdown, India's PMI Index indicates optimism for growth.

• In 2024, Indian startups began positively with a 14% increase in funding compared to the previous year.

In March, India's core infrastructure sectors, which constitute 40% of the country's industrial output, achieved a growth rate of 5.2%, representing a slowdown from February's robust 6.7% expansion. The deceleration primarily resulted from reduced crude oil production and contractions in refinery products and fertilizers. Despite this slowdown, the sector maintained positive growth, indicating a steady, although slower, expansion.

April witnessed the Indian manufacturing sector maintaining its robust growth, even with a slight deceleration. The Manufacturing PMI (Purchasing Managers' Index) dipped slightly to 58.8 from March's 16-year high of 59.1. However, this minor dip still represents the second-best improvement in three and a half years. The sector's strong demand continued to drive further output growth, underscoring its resilience and potential for sustained growth.

Similarly, the India Services PMI slightly declined, dropping to 60.8 from 61.2 in March. Despite this drop, the index still showed one of the fastest growth rates in nearly 14 years. Favourable market conditions and sustained strong demand drove this robust performance, showcasing the sector's resilience and adaptability in a volatile economic environment.

The Indian startup ecosystem began 2024 on a positive note, with startup funding in April increasing by 14% compared to the same month last year. Investments rose from $912 million in April 2023 to $1,040 million in April 2024, nearly matching the $1,180 million raised in March. PharmEasy stood out as the only startup to secure funding in the triple digits during the previous month. This funding momentum reflects confidence in the potential of Indian startups and their capacity for innovation and growth.

In summary, India's dynamic and evolving economic landscape faced some slowdown in the core sector growth and Purchasing Manager’s Index, the startup ecosystem maintains its momentum.

Stay abreast of macro trends using #PeripheralVision – Kanvic's interactive dashboard designed to enable C-level executives to identify subtle signals and adjust strategies in response to emerging realities-https://www.kanvic.com/peripheral-vision

About the authors

Deepak Sharma is the Cofounder and Director at Kanvic Consulting, where Dimpy Goyal is an Associate Consultant.