Indian Economy: 2022 Outlook

Expert Speak

06 December 2022 • 7 min read

Indian Economy: 2022 Outlook

Raghav Sand

If you have been paying attention to commentary from economists and global business leaders, a recession in 2023 is inevitable. The union and state governments in India need to get their act together and prioritise capacity building measures.

Merchandise exports and imports have shown growth as compared to figures from last year. Indian Rupee is at record lows against the US Dollar; this is a good sign for exporters, but not so good from the imports and balance of trade point of view.

The Indian economy is among the few bright spots in the world right now. Inflation has not shown any signs of slowing down, and as a result, central banks all over have been forced to increase policy rates. Continuous rise in rates has now started to impact consumption patterns and investment in new projects.

Let us try to gauge the health of the Indian economy with help from key economic indicators.


Good and Services Tax (GST)

The gross GST revenue for the month of September 2022 was ₹1,47,686 crore - this is 26% more than the revenue in the same month last year. GST revenues have crossed the ₹1.4 lakh crore mark for the seventh month in a row. September 2022 witnessed the second highest single day collection of ₹49,453 crore on 20th of the month.

India GST Collection: April to September 2022

The union finance ministry has attributed the buoyancy in GST collections to economic recovery and better compliance framework. As GST is a consumption based tax, the government should be mindful about implementing any further tax rate hikes.

India’s Merchandise Trade (Apr – Sept)

As per data released by the Ministry of Commerce and Industry, India’s merchandise export in April – September 2022-23 was $229.05 billion, and imports during the same time frame was $378.53 billion. Annual rate of growth in exports and imports was 15.54 per cent and 37.89 per cent, respectively. Consequently, the trade deficit during April – September 2022 was $149.47 billion.


Manufacturing Sector

Indian manufacturers reported a positive outlook for the coming months. Prices of inputs are at a 23-month low as per data released by S&P Global Market Intelligence; 9 out of 10 firms reported no change in input costs. The report also highlighted that business optimism is at a 7-year high. Onset of the festive season in India has contributed significantly to take the manufacturing sector in expansion territory.

Inflation Nation

Inflation is everywhere. And, it is not going to come down anytime soon. The headline inflation number quoted by media and policy makers relates to general increase in prices over the last 12 months. The Consumer Price Index (CPI) for the month of September 2022 stood at 7.41 per cent, while the food inflation was 8.60 per cent.

India Inflation September 2022

Prices of cereals, vegetables, and spices registered the sharpest increase over the past 12 months, whereas prices of eggs, oils and fats witnessed some much needed correction. Of all the items under the food and beverages category, the combined (rural plus urban) inflation rate for vegetables was recorded at 18.05 per cent.

Prices of clothing and footwear are showing no signs of cooling down, as inflation in this category for the month of September stood at 10.17 per cent. On a monthly basis, prices of fruits gave some relief to household budgets.

Indian Stock Market

Domestic Institutional Investors(DII), and retail investors have bestowed their faith in Indian capital markets. Foreign Institutional investors (FII) have withdrawn money from the equity segment, while they have invested in the debt segment for three months in a row now.

Foreign Portfolio Investment

The NIFTY-50 and BSE Sensex have remained range bound, while extended periods of withdrawals from FIIs will test the appetite of domestic players. Interestingly, though, the rate of withdrawals by the FIIs in the equity segment has been subdued.

Hope: Word Power

The demographic potential of India and untapped industrial capacity should not make policy makers complacent. If you have been paying attention to commentary from economists and global business leaders, a recession in 2023 is inevitable. The union and state governments in India need to get their act together and prioritise capacity building measures.


There are evident signs for optimism and apparent blind spots in our economy. We must formulate plans to take care of external events. Hope is a powerful four-letter word, but it cannot work in isolation. We need vision and execution to realise the expectations of a billion-plus people.

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