Coming back to us, the problem can be separated into groups which I’ve ranked in subjective order of reliability:
1. numerical data on financial transactions
These include forex reserves, export and import data (services and merchandise), FDI and other figures that can be quickly collected and summarized on a daily/weekly/monthly rate at a single point , eg the RBI who maintain all forex clearinghouse information.
These are the most reliable data. None of these are indicative of a slowdown however - just he opposite, with strong forex reserves and services exports, and merchandise trade reflective of prevailing world trade situation . FDI is a little more tricky as there’s scope for inaccuracy in reinvested earnings data, but fresh inflows are tracked directly.
Just to clarify some basics, strong FX reserves growth, high FDI, exports are not contradictory with slow domestic growth.
1) FX reserves go up when there is a Balance of Payments a/c (BoP)are +ve and the RBI sterilizes the inflows to prevent INR appreciating too much (RBI buys USD, sells rupees). BoP is made up of:
1) Capital account - investors money inflows/outflows
There is huge inflows into EM driven by ample USD liquidity provided by a dovish Fed. India is one of the main EMs. This also explains to a large extent the stock market melt up. Also India's long run bullish case remains intact. So funds continue to pour in, save for episodes like after the inexplicable tax proposal in this year's budget.
2) Current account - exports - imports + remittances, dividend and coupon payments on cross-border assets.
exports continue to grow as India's main market (US) continues to do well. OTOH India barely exports to troubled econs like China, SK, Germay.
Imports growth fell due to domestic consumption slowdown. This is a classic sign of end-stage EM slowdown episode.
What this means is that while the external sector continues to do well, the domestic econ did poorly this year. Which is why some policymakers excuse that we are suffering due to external slowdown makes no sense - it is quite the opposite.