This increase in GST revenue from imports reached ₹57,580 crore, a significant contributor to the overall collection. In April 2025, the GST collection stood at ₹2.23 lakh crore, highlighting the dramatic growth in just one year.

That context matters because it reflects broader economic trends. Despite this impressive revenue boost, signs of softening domestic demand have emerged. Domestic revenue grew by only 4.3% year-on-year, totaling ₹1.85 lakh crore.

Moreover, the refund process also saw changes: total refunds issued increased by 19.3%, reaching ₹31,793 crore. Interestingly, domestic refunds surged by 54.6%, while export-related refunds dropped by 14%. This shift indicates a complex interplay between import trade and domestic market dynamics.

Historically, India’s GST collections have shown steady growth—rising from ₹1.67 lakh crore in April 2022 to ₹2.10 lakh crore in April 2024 before this latest spike.

So what does this mean for the future? Observers are keenly watching how these trends will affect economic policies and consumer behavior as India navigates its path toward sustained growth amidst changing global trade patterns.

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Economic activity in the manufacturing sector saw an expansion in February for the second consecutive month, marking only the third time in the last 40 months, according to the latest ISM® Manufacturing PMI® Report released on March 2, 2026.

Production Growing

The Manufacturing PMI® recorded a value of 52.4 percent in February, which is a slight decrease of 0.2 percentage points from January’s 52.6 percent. This indicates that the overall economy has been in a state of expansion for 16 months. A Manufacturing PMI® above 47.5 percent typically signals economic growth.

Employment Contracting

The New Orders Index showed growth for the second month in a row, reaching 55.8 percent, although this is down 1.3 percentage points from January’s 57.1 percent. The Production Index also decreased to 53.5 percent, down 2.4 percentage points from January’s 55.9 percent. The Employment Index, however, registered a slight improvement at 48.8 percent, up 0.7 percentage points from January’s 48.1 percent.

Supplier Deliveries Slowing

The Supplier Deliveries Index indicated a continued slowdown for the third month, with a reading of 55.1 percent, which is an increase of 0.7 percentage points from January. This index is inversely related; thus, a reading above 50 percent signifies slower deliveries, which is common as the economy strengthens and demand rises.

Raw Materials Inventories Contracting

The Inventories Index recorded a value of 48.8 percent, reflecting a 1.2 percentage point increase from January’s 47.6 percent. The Customers’ Inventories Index, meanwhile, showed a slight increase to 38.8 percent, indicating that customer inventories remain too low.

Customers’ Inventories Too Low

The Prices Index remained in expansion territory, registering 70.5 percent, which is an 11.5 percentage point increase from January’s 59 percent, marking the highest level since June 2022. The Backlog of Orders Index rose to 56.6 percent, up 5 percentage points from January’s 51.6 percent, indicating a healthy backlog.

Prices Increasing

In terms of demand indicators, the New Orders, Backlog of Orders, and New Export Orders indexes are all in expansion territory, while the Customers’ Inventories Index remains in a ‘too low’ status, which is generally seen as a positive sign for future production.

Imports Growing

The New Export Orders Index recorded a slight increase to 50.3 percent, while the Imports Index surged to 54.9 percent, marking a 4.9 percentage point rise from January’s 50 percent, the highest since February 2022.

Exports Growing

Overall, the manufacturing sector is still expanding, albeit at a slower pace than the previous month. The report indicates that 21 percent of the sector’s gross domestic product (GDP) contracted in February, compared to 20 percent in January, with only 1 percent of manufacturing GDP in strong contraction.

What Respondents Are Saying

Industry leaders have expressed concerns regarding pricing pressures and demand fluctuations. Comments from various sectors highlight the challenges posed by tariffs and the need for cost discipline amidst ongoing economic uncertainties.

Manufacturing at a Glance

The February 2026 Manufacturing PMI® report provides a comprehensive overview of the manufacturing landscape, showcasing both growth and challenges faced by the sector.

Conclusion

In summary, while the manufacturing sector in February 2026 shows signs of growth, it is accompanied by challenges such as rising prices and employment contraction. The data reflects a complex landscape that requires careful navigation by industry leaders.

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