India FY2025 GDP Revised Marginally Higher

The Indian GDP is expected to grow 7.4% in real terms during the 2026 financial year, according to a preliminary estimate, to reflect a rebound from the 6.5% in the earlier period and maintain India's spot as the fastest growing economy in the G20. The acceleration compared to the government's initial projection that growth would range between 6.3% and 6.8%, when mounting tariffs by the United States and lower imports of cheap oil from Russia presented concerns of a higher impact on the economy. Government consumption accelerated (5.2% vs 2.3% in FY25) and gross fixed capital formation picked up further (7.8% vs 7.1%), although private expenditure slowed slightly (7% vs 7.2%). In turn, exports (6.4% vs 6.3%) expanded less than imports (14.4% vs -3.7%).

The Indian GDP is expected to grow 6.5% in the 2024/2025 fiscal year ending March 2025, marking the slowest pace of growth since the Covid pandemic drove the economy into a recession in the 2021/2022 year, but revised marginally higher form the initial estimate of 6.4%. The figure marks a sharp slowdown from the upwardly revised 9.2% growth rate from the earlier fiscal year, missing the ambitious expectations that were signaled by the government as higher energy prices and slower overall growth in Asian emerging economies magnified the impact of tight liquidity conditions stemmed from restrictive monetary policy from the RBI and the central bank’s effort to defend the rupee by intervening in foreign exchange markets.