India’s consumer confidence dips amid price pressures but spending remains steady

Household sentiment in India weakened in July due to concerns over prices and employment, yet consumption habits show resilience, according to Reserve Bank of India surveys.

Consumer confidence in India slipped in July as households became more cautious about the economy, jobs and prices, according to the Reserve Bank of India’s latest round of household surveys. The central bank said the weaker mood was visible in both cities and the countryside, even though many families still expect conditions to improve over the next year.

The RBI conducted the July rounds of its urban and rural consumer confidence surveys between July 11 and July 20, covering 5,987 respondents in 19 major cities and 8,581 respondents in rural and semi-urban areas across all states and three Union territories. Earlier reports on the launch of the surveys noted that the data are used as inputs for monetary policy, alongside the Reserve Bank’s separate inflation expectations poll.

In urban India, the current situation index fell to 88.3 from 90.7 in May, while the future expectations index eased to 115.3 from 118.7. Rural sentiment also softened, with the current situation index dropping to 91.7 from 95.2 and the future expectations index declining to 113.6 from 119.3. The surveys also showed weaker views on the economy and employment in both segments, with inflation remaining a prominent concern.

Households were still prepared to spend, however. The RBI said both urban and rural consumers reported firmer intentions to buy essentials and slightly stronger appetite for non-essential purchases. Income expectations remained positive in both areas, though optimism faded, especially in rural India, where current income readings were negative. That suggests families are still dealing with price pressure and softer confidence, even as consumption has so far held up.