On May 30, 2025, the Government of India released the final Gross Domestic Product (GDP) figures for Financial Year 2024-25 (FY 2025), recording a growth rate of 6.5%. While lower than the previous year’s 9.2%, this performance reflects India’s economic stability and resilience amid global uncertainties. Notably, the fourth quarter (January-March 2025) achieved a 7.4% growth, surpassing the estimated 6.7%, underscoring the economy’s strong momentum.
Key Highlights:
- India’s GDP growth for Financial Year 2024-25 (FY 2025) stood at 6.5%, reflecting steady economic progress.
- The fourth quarter (January-March 2025) recorded a GDP growth of 7.4%, surpassing the estimated 6.7%.
- The construction sector showed an impressive growth of around 10%, while agriculture also performed positively.
- Favorable monsoon predictions are expected to drive further growth in the future.
- India has recently become the world’s fourth-largest economy, with potential to reach the third spot.
Quarterly Performance
The first and second quarters of FY 2025 recorded growth rates of 5.6% and 6.2%, respectively, impacted by general elections that temporarily affected government spending and private investments. Recovery began in the third quarter with a 6.2% growth, and the fourth quarter’s 7.4% growth concluded the year on a strong note. This performance was driven by increased consumer spending, capital expenditure, and export growth.
Growth Overview
The Government of India released the final GDP figures for Financial Year 2024-25 (FY 2025), reporting a growth rate of 6.5%. This performance underscores the resilience of India’s economy amid global economic uncertainties. Notably, the fourth quarter (January-March 2025) recorded a 7.4% growth, exceeding the estimated 6.7%, signaling strong economic momentum.
Sectoral Performance
The construction sector registered an impressive growth of approximately 10%, driven by government infrastructure projects and private investments. The agriculture sector also demonstrated positive performance, supported by favorable weather conditions and government initiatives. The India Meteorological Department (IMD) has forecasted above-normal monsoon rainfall, which is expected to boost rural incomes and agricultural output.
Economic Context
The year began with slower growth in the first and second quarters due to general elections, which temporarily impacted government spending and private investments. However, the economy showed robust recovery in the third and fourth quarters. These figures highlight India’s recent achievement of surpassing the United Kingdom to become the world’s fourth-largest economy. Experts believe that with the current growth trajectory, India could soon overtake Japan to claim the third position.
Future Outlook
The government’s focus on infrastructure development, digitalization, and initiatives like ‘Make in India’ is expected to sustain this growth momentum. These figures provide positive signals for investors and policymakers, reinforcing confidence in India’s economic potential.
Sectoral Contributions
Construction Sector
The construction sector recorded an impressive growth of approximately 10% in FY 2025. This growth was fueled by government infrastructure initiatives, such as road, rail, and urban development projects, alongside private sector investments. This sector plays a critical role in job creation and stimulating economic activity.
Agriculture Sector
The agriculture sector also showed positive performance, driven by favorable weather conditions and government support. The India Meteorological Department (IMD) has predicted above-normal monsoon rainfall, which is expected to further boost agricultural output and rural incomes. This will stimulate consumer demand and support other sectors.
India’s Global Standing
India recently surpassed the United Kingdom to become the world’s fourth-largest economy. With the current growth trajectory, experts believe India could soon overtake Japan to claim the third position. This achievement highlights the strength of India’s economic policies and its diverse economic base.
Expert Insights
Chief Economic Advisor V. Anantha Nageswaran stated in a press briefing, “The 7.4% growth in Q4 is a testament to our economy’s resilience. Despite challenges posed by elections earlier in the year, the economy has shown remarkable recovery and strength in the latter half.”
Economist Tarun Srivastava from XYZ Research commented, “The GDP figures are encouraging, particularly the Q4 numbers. The construction sector’s performance is particularly noteworthy, as it reflects significant investment activity critical for long-term growth. Additionally, the agriculture sector’s resilience and favorable monsoon forecasts bode well for rural economies.”
Future Outlook
The government’s focus on infrastructure development, digitalization, and initiatives like ‘Make in India’ is expected to sustain this growth momentum. Recent budget announcements with increased allocations for capital expenditure and social sector spending are likely to further stimulate the economy. Additionally, policy measures by the Reserve Bank of India (RBI), such as reductions in the Cash Reserve Ratio (CRR) and repo rate, will support liquidity and credit growth.
Conclusion
India’s 6.5% GDP growth for FY 2025 and 7.4% growth in Q4 paint a picture of an emerging economy poised for further progress on the global stage. These figures provide a positive outlook for investors and policymakers, reinforcing confidence in India’s economic strength and potential.
