India’s services sector expanded at its slowest pace in 17 months in June as weaker domestic demand and slower new orders weighed on activity, though export orders remained resilient.

Retail trade, administrative support services and banking among other major components

Economic activity also remained steady, with e-way bill generation accelerating 14.5% year-on-year in June, the fastest pace in four months.

The improvement suggests freight movement and supply chain activity remained healthy at the end of the first quarter of FY27

Fuel consumption remained resilient despite higher prices

Petrol consumption rose by 7% in June, while demand for diesel was up 5.5% from the year-ago period, preliminary data from Petroleum Planning and Analysis Cell shows

Despite the slowdown, the reading remained well above the 50-mark, indicating continued expansion in factory activity.

It added that manufacturing growth remained encouraging despite some moderation

The report also showed that bank credit remained robust, increasing 17.7% year-on-year to Rs 215.5 trillion in the fortnight ended June 15, 2026

Oil marketing companies made a cumulative under-recovery of Rs 1 lakh crore on petrol, diesel and LPG during March–May 2026. Analysts also note that crude oil prices may further rise as oil inventories continue to shrink globally.

Government says lending is normalising after two years of strong growth, while industry cites weaker demand and global headwinds.

While the reopening of the Strait of Hormuz is expected to facilitate the recovery of energy flows and strengthen market confidence, market participants continue to assess that market normalization, and inventory replenishment will take time,S&P Global Energy said.

For the week ended June 5, foreign currency assets -- a major component of the reserves -- was down $2.704 billion to $543.444 billion, the data released by the Reserve Bank of India (RBI) showed.

The data suggests that India’s export performance remained broadly resilient in the first two months of FY26, even as global demand conditions remain uneven and commodity price movements continue to influence headline trade numbers.

Inflation has remained below the RBI's 4% target for 15 consecutive months