India Economic Growth: India continues to be the fastest-growing major economy in the world, thanks to strong domestic demand despite various global challenges. In the third quarter of the fiscal year 2024-25 (October-December), India’s GDP growth rate was recorded at 6.2%, surpassing several developed and developing nations like China, the USA, Indonesia, and Brazil.
India’s GDP Growth and Future Projections– India Economic Growth
A positive sign for the Indian economy is the expected boost from the grand Mahakumbh event, increased capital expenditure by public sector companies, and rising non-petroleum and non-gems & jewelry exports. These factors are expected to drive the GDP growth rate to 7.6% in the fourth quarter (January-March) of FY 2024-25.
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Expected GDP Growth Rate for FY 2024-25
With strong performance in the fourth quarter, India’s GDP growth rate is projected to be 6.5% for the full fiscal year. Achieving this growth rate will bring the Indian economy’s size close to $4 trillion by the end of March 2025.
Chief Economic Advisor V. Anantha Nageswaran highlighted that the Mahakumbh event in Prayagraj significantly boosted industries like transport, food, and hospitality, contributing to economic growth.
Impact of Mahakumbh on GDP
The Mahakumbh 2025 saw participation from 50-60 crore people, leading to a surge in spending. This increased expenditure is expected to have a significant impact on GDP growth in the fourth quarter.
- Public spending, which slowed due to elections, has now picked up pace.
- By January 2025, 75% of the estimated capital expenditure had already been utilized.
- Exports of non-petroleum and non-gems & jewelry sectors have increased by 10%.
India to Reach $4 Trillion Economy Soon
Both rural and urban consumption are rising, making the 7.6% growth forecast for Q4 realistic. By the end of FY 2024-25, India’s economy is expected to reach $3.92 trillion, bringing the nation closer to the $4 trillion milestone.
Sector-wise GDP Growth in Q3 FY 2024-25
Despite a slowdown in manufacturing, the strong performance of agriculture and the services sector helped achieve a GDP growth rate of over 6%. The following table showcases sector-wise growth:
| Sector | Growth Rate (%) |
|---|---|
| Agriculture, Allied & Fisheries | 5.6 |
| Mining & Related Industries | 1.4 |
| Manufacturing | 3.5 |
| Electricity, Gas, Water Supply | 5.1 |
| Construction | 7.0 |
| Trade, Hotels, Transport | 6.7 |
| Finance, Real Estate & Professionals | 7.2 |
| Public Administration, Defense & Others | 8.8 |
Global GDP Growth Comparison (Q3 2024-25)
India outperformed major economies in GDP growth during the October-December quarter:
| Country | GDP Growth Rate (%) |
| India | 6.2 |
| China | 5.4 |
| Indonesia | 5.02 |
| USA | 2.5 |
| UK | 1.4 |
| Japan | 1.2 |
| France | 0.6 |
| Mexico | 0.48 |
Private Investment and Risks Ahead
- Private investment surged in Q3, with ₹7 lakh crore worth of new projects announced, compared to less than ₹2 lakh crore in Q1.
- Despite positive growth, challenges such as rising global trade tariffs, a weaker rupee against the dollar, and stock market volatility pose risks to the economy.
Conclusion
India’s economy remains resilient with strong domestic demand, rising investments, and government initiatives. With robust Q4 growth expectations, India is on track to become a $4 trillion economy soon, continuing its lead as the world’s fastest-growing major economy.
Stay tuned for more updates on India’s economic progress!
