(Reuters) – India’s economy grew 7.4% in the January-March quarter from a year earlier, driven by the construction and manufacturing sectors, data showed on Friday.
The GDP rise was faster than the 6.7% growth projected by analysts in a Reuters poll, and was up from revised growth of 6.4% in the previous quarter.
It was the fastest expansion since January-March 2024.
Growth for the fiscal year was estimated at 6.5%, the highest among the world’s large economies.
COMMENTARY:
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
“Real GDP was expected to fare strongly, partly because of the boost from net indirect taxes.
A catch-up in government spending accompanied by better faring construction output has provided a lift to the headline.”
“We expect growth to stabilise around the mid-6% handle at the start of fiscal 2026, with farm output, purchasing power relief from lower inflation and monetary easing, as well as on track public spending expected to stay supportive of growth.”
“External uncertainties could impact through the trade and investment channels.”
MADAN SABNAVIS, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI
“India’s GDP growth numbers for fourth quarter and fiscal 2025 do display a strong degree of resilience with growth being maintained at 6.5% for the year.”
“With no change in the growth rate compared with the 2nd advance estimate, we do believe that growth for fiscal 2026 will be maintained in the range of 6.4-6.6%.”
DEVENDRA KUMAR PANT, CHIEF ECONOMIST AND HEAD OF PUBLIC FINANCE, INDIA RATINGS & RESEARCH, GURGAON
“Investment outlook is still hazy, government has done the heavy lifting on investment since COVID-19, it has high deficit and debt and government-driven investment growth can’t last forever.”
“The private sector participation in investment hasn’t yet taken off on durable basis across sectors.
The reciprocal tariff is causing its shadow over global GDP and trade growth, which may force investors to postpone their investment decision.”
“Weakness in global GDP and trade growth may have an impact on current account and which may pull down India’s GDP growth to some extent.”
MADHAVI ARORA, LEAD ECONOMIST, EMKAY GLOBAL, MUMBAI
“The fourth-quarter growth print partly reflects the back loaded spending effect of the government, both centre and states, led more by public capex spending.”
“Fiscal 2026 will be impacted by global uncertainties weighing on near term investment intentions, while easing urban incomes will weigh on private consumption.”
“However, a part of this could be countered by continued monetary easing on both policy rates and regulatory frameworks, even as the fiscal policy will have limited growth-pushing levers through conventional easing.”
SUJAN HAJRA, CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI
“This impressive performance comes despite heightened geopolitical tensions and global trade uncertainties.
With this momentum, India retains its position as the world’s fastest-growing major economy and remains firmly on track to become the fourth-largest economy by the end of fiscal 2026.”
“Looking ahead, we expect India’s growth to remain resilient and robust at 6.5% in fiscal 2026.”
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
“The Q4 GDP numbers are marginally higher than our expectations but broadly tracking the government’s earlier estimate.
The GVA estimate however remain more tepid at 6.8%.”
“Expectedly, the high net indirect tax growth has led to the wide gap between the two. The high frequency data in the last few months continues to point towards a patchy recovery, with the sequential momentum suggesting moderation compared to the previous quarter.”
“We expect the benign inflation and soft growth to continue to provide the MPC room for incremental monetary easing, with 25 basis points cut in the upcoming June policy.”
ADITI NAYAR, CHIEF ECONOMIST, ICRA, GURUGRAM
“In Q4 FY2025, manufacturing, construction, financial real estate and professional services, and public administration, defense, etc logged a healthier pace of growth relative to our projection.”
“However, private consumption growth eased, and likely remained uneven, while government final consumption expenditure contracted in the fourth quarter of fiscal 2025, after a gap of two quarters.”
“While fiscal 2026 has begun with heightened uncertainty around global trade policies, the outlook for domestic drivers of growth, including private consumption and government investment appears largely resilient.”
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
“The GDP print for Q4 is higher than expected.
This indicates that the economy has recovered from the slowdown seen in the middle of last year.”
“The outlook for fiscal 2026 continues to face global headwinds on account of tariff uncertainties and global growth slowdown.
We continue to expect GDP growth of 6.3% for fiscal year 2026. This hinges on a continued recovery in domestic demand and support from both monetary and fiscal stimulus.”
“The print does little to change our view of the RBI policy next week where the central bank is expected to cut the policy rate by 25 basis points.
Given global headwinds, the central bank is expected to remain growth supportive.”
(Reporting by Manvi Pant, Hritam Mukherjee, Kashish Tandon and Yagnoseni Das in Bengaluru; Jaspreet Kalra and Ira Dugal in Mumbai; Editing by Varun H K and Mrigank Dhaniwala)
