India’s GDP Grows 7.4% In Q4; FY25 Growth At 6.5%
India is expected to surpass Japan by the end of 2025–26, placing it behind only the US, China, and Germany. - IMF
NEW DELHI: Retaining its tag as the world’s fastest-growing major economy, India’s economic growth in the March quarter stood at a better-than-expected 7.4%, higher than the previous three quarters. While growth in the January–March period was lower than the 8.4% expansion recorded in the same quarter a year ago, the government reported that the economy expanded by 6.5% in 2024–25, compared to 9.2% in 2023–24, according to official data released on Friday.
The GDP data comes at a time when the Narendra Modi-led NDA government has been asserting that India will become the world’s fourth-largest economy this year, citing International Monetary Fund (IMF) data. As per IMF estimates, India is expected to surpass Japan by the end of 2025–26, placing it behind only the US, China, and Germany.
Reacting to the data, Chief Economic Advisor (CEA) Anantha Nageswaran said that India has outperformed other major economies still recovering from the COVID-19 pandemic in terms of real GDP. “We retain our growth outlook between 6.3%–6.8% for FY26, with a series of signals supporting this upbeat view. Capital goods imports are steady, infrastructure goods output is rising, and the urban unemployment rate is on the decline,” Nageswaran said.
His comments followed data showing a moderation in Q4 GDP to 7.4% year-on-year, largely due to muted manufacturing growth. “India is holding up its growth numbers much better than some advanced economies in a growth-scarce environment. Momentum in economic activity that picked up in the fourth quarter continues into April. The country’s private consumption share rose to its highest level since FY04 and is holding strong,” he added.
However, several economists had anticipated that GDP figures would surpass forecasts, primarily due to reduced government subsidy disbursements. In line with the government's second advance estimates, full-year real GDP growth for FY2024–25 stood at 6.5%, marking a four-year low.
On the fiscal balance front, the CEA stated that conditions are favorable for India’s fiscal stability. “Food inflation has eased, and the IMD has forecast a ‘well-spaced out’ monsoon. The external sector is supported by resilient merchandise and services exports. Gross foreign direct investment (FDI) remains steady, even though foreign portfolio investments show some volatility. The external environment does not pose a risk to FDI inflows,” he noted.
According to data from the National Statistical Office (NSO), in its second advance estimate released in February, real GDP for 2024–25 is estimated to reach Rs 187.97 lakh crore, compared to Rs 176.51 lakh crore in 2023–24, registering a growth rate of 6.5%.
Nominal GDP for 2024–25 is estimated at Rs 330.68 lakh crore, up from Rs 301.23 lakh crore in 2023–24, showing a growth rate of 9.8%. Real GDP for Q4 of 2024–25 is estimated at Rs 51.35 lakh crore, compared to Rs 47.82 lakh crore in the year-ago quarter, reflecting a 7.4% growth.
Additionally, the real Gross Value Added (GVA) is estimated at Rs 171.87 lakh crore for FY2024–25, up from Rs 161.51 lakh crore in FY2023–24, indicating a growth rate of 6.4%. Nominal GVA is estimated at Rs 300.22 lakh crore in FY2024–25, compared to Rs 274.13 lakh crore in FY2023–24, marking a 9.5% growth.