India’s economy slows, stalling once thriving manufacturing

NEW DELHI – India’s economy, once one of the fastest growing in the world, is braking in a blow to labour-intensive manufacturing.

Growth slipped to 5% in the April-June quarter, the slowest pace in six years. Many economists believe Prime Minister Narendra Modi’s signature economic policies are at least partly to blame.

A surprise demonetization in 2016 and the hasty rollout of a new goods and services tax have hit manufacturing hard.

Especially the auto industry, the fourth largest in the world, a pillar of the Indian economy that alone contributes 7.5% to the country’s GDP and employs almost 37 million people.

The Auto Component Manufacturers Association of India says car makers are likely to shed as many as a million jobs in the months ahead because of declining sales.