India GDP Growth in FY 2024-25: A Mixed Bag of Resilience and Slowdown

India’s Economic Performance in FY 2024-25

India GDP growth for FY 2024-25 stood at 6.5%, a decline from 9.2% in FY 2023-24. However, the Q4 GDP growth exceeded expectations, reaching 7.4%, fueled by strong performances in construction, agriculture, and services.

Key Economic Indicators:

• Q4 FY25 Growth: 7.4%, higher than the previous quarter’s 6.4%.
• Full-Year Growth: 6.5%, marking a four-year low.
• Sectoral Performance:
  • Agriculture: Grew by 4.6%, up from 2.7% in FY24.
  • Construction: Recorded 9.4% growth, reflecting strong infrastructure investments.
  • Services: Expanded by 8.9%, with financial and real estate sectors contributing 7.2% growth.

Sectoral Analysis: Winners and Losers

Construction Sector Leads Growth

The construction sector emerged as the top contributor, growing at 9.4% in FY25 and 10.8% in Q4. This surge was driven by government infrastructure projects, including highways, railways, and urban development.

Agriculture Shows Strong Recovery

Agriculture recorded 4.6% growth, rebounding from 2.7% in FY24, thanks to better monsoon conditions and increased rural demand.

Services Sector Maintains Momentum

The services sector, including financial, real estate, and professional services, grew by 8.9%, with public administration and defense contributing 8.7% growth.

Global Influences and Economic Challenges

Impact of Global Markets

India’s economy faced external challenges, including supply chain disruptions, energy market volatility, and global trade uncertainties.

• US tariff policies affected exports.
• China’s economic slowdown impacted global demand.
• Oil price fluctuations influenced inflation trends.

Inflation and Monetary Policy

The Reserve Bank of India (RBI) is expected to cut the repo rate for the third time in a row to boost growth.

Future Outlook: What’s Next for India’s Economy?

Key Projections for FY 2025-26

• IMF Forecast: India’s economy is projected to grow at 6.5% in FY26, maintaining its position as the fastest-growing major economy.
• Government Initiatives: Increased capital expenditure on infrastructure and manufacturing incentives will drive growth.
• Private Consumption: Expected to rise by 7.2%, reflecting strong domestic demand.

Conclusion: India’s Economic Resilience Amid Global Uncertainty

Despite a slowdown in overall GDP growth, India remains one of the world’s fastest-growing economies. The strong Q4 performance, led by construction, agriculture, and services, signals economic resilience. As the government focuses on infrastructure and policy reforms, India’s growth trajectory remains optimistic.

Also read – Nykaa Q4 FY25 Surge: Profit Jumps 193% as E-Commerce Giant Expands Retail Presence