India’s demand story is throwing up an unusual split. Consumers are still buying cars, two-wheelers and tractors at a brisk pace but the labour market that normally underpins household spending looked softer through the first quarter of 2026-27. Retail passenger vehicle sales rose 19.1% year-on-year in July, tractor sales jumped 28.1% and two-wheeler sales climbed 28.3%, according to data compiled in the Reserve Bank of India’s August Bulletin. Overall retail automobile sales grew 25.9%. The RBI assessment said domestic demand remained strong during July, supported by rural consumption, while urban demand also stayed firm.