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NEW DELHI: India’s economy grew faster than expected at 7.4% in the Jan-March quarter, led by robust growth in agriculture and construction. The strong quarterly showing – the fastest in the fiscal year – pushed overall growth in 2024-25 to 6.5%, according to data released by the National Statistics Office.The Jan-March figure outperformed the upwardly revised 6.4% in the Oct-Dec period, and pointed to robust momentum in the fourth quarter amid global uncertainty. India remained the fastest growing major economy in the March quarter, followed by China at 5.4% and Indonesia at 4.9%. The full-year growth estimate was in line with expectations and the second advance estimate, but the lowest in 4 years, on the back of 9.2% expansion in the previous year.Chief economic adviser V Anantha Nageswaran Friday said robust domestic demand has supported GDP growth and private consumption share has risen to the highest level since FY04. “Govt retains its outlook on FY26 growth at 6.3-6.8%, with private consumption, especially the rural rebound, and resilient services exports as the key drivers,” Nageswaran said in a presentation after the data was released. Multiple agencies project India’s growth to be in the range of 6.3-6.7% this year, he said.
The Jan-Mar quarter data showed the farm sector remaining robust with growth of 5.4% while the construction sector grew 10.8% in the same period. The services sector remained steady at 7.3% in the March quarter compared with an expansion of 7.8% in the same year earlier quarter.The 6.5% growth for 2024-25 was attributed to a pickup in private consumption and investment while the acceleration in investment demand led to the sharp jump in the fourth quarter performance.“In line with expectations, real GDP registered 6.5% growth in fiscal 2025, elevating the Indian economy’s size to $3.9 trillion from $3.6 trillion in fiscal 2024,” said DK Joshi, chief economist at ratings agency Crisil. “Consumption growth outpaced GDP, primarily driven by robust rural demand supported by a strong agricultural sector. A sharp catchup in investment growth in the last quarter also brought investment growth above GDP growth.… Net net we expect India’s GDP to grow at 6.5% in fiscal 2026 with risks tilted downwards,” said Joshi.
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