Will India Achieve 6.9% GDP Growth in Q4 of FY25?
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Synopsis
In the face of global uncertainties, India’s GDP growth is anticipated to reach 6.9% in Q4 FY2025. This rise from 6.2% in the previous quarter reflects a mixed investment climate and shifting consumer sentiments, showcasing resilience amid challenges. Discover the factors influencing this economic outlook.
Key Takeaways
- India's GDP growth is predicted to hit 6.9% in Q4 FY2025.
- Improved consumer sentiment in rural and urban areas.
- Investment activity showed mixed trends due to tariff-related uncertainties.
- State-investor meetings yielded record project announcements.
- Service exports remained strong, reaching $102.0 billion.
New Delhi, May 19 (NationPress) India’s GDP growth is projected to rise to 6.9 percent in Q4 FY2025, up from 6.2 percent in Q3 FY2025, despite the increased global uncertainty stemming from the US tariff situation during this period, as indicated by an ICRA report released on Monday.
The report further emphasizes an improvement in consumer sentiment across both rural and urban landscapes.
ICRA's chief economist, Aditi Nayar, stated, “In a quarter marked by heightened global uncertainty, ICRA anticipates India’s GDP growth to have climbed to 6.9 percent in Q4 FY2025, compared to 6.2 percent in Q3 FY2025. Trends in private consumption and investment activity were inconsistent in Q4 FY2025, partially due to tariff-related uncertainty.”
The significant boost in the output of most rabi crops is likely to have enhanced the agri-GVA growth in Q4 FY2025. However, the sluggish growth in industrial volume and a decline in several service sector indicators are expected to have negatively impacted GVA growth in these areas,” she added.
According to data on the Centre’s indirect taxes and subsidies, ICRA estimates that net indirect tax growth surged sharply in this quarter, rising from 6.8 percent in Q3 FY2025, largely driven by a significant reduction in the Centre’s subsidy disbursement (down 33 percent in Q4 FY2025 compared to an increase of 31.1 percent in Q3 FY2025).
Amid trade-related uncertainties caused by US tariffs, India’s investment activities showed a mixed pattern in Q4 FY2025. Year-on-year performance of six out of eleven investment-related high-frequency indicators improved in Q4 compared to Q3, mainly in the construction sector, including outputs for infrastructure/construction goods, cement production, and finished steel consumption.
Moreover, state-investor meetings in Madhya Pradesh, Kerala, Karnataka, and West Bengal resulted in project announcements reaching a record level of Rs 19.2 lakh crore in Q4 FY2025, compared to Rs 16.1 lakh crore in Q4 FY2024.
The Centre’s capital expenditure in Q4 FY2025, as reflected in the revised budget estimate, indicates a strong year-on-year growth of approximately 21 percent for the quarter.
Although the year-on-year growth of service exports slowed to 14.1 percent in Q4 FY2025 from 17.9 percent in Q3 FY2025, it remained in double digits for the third consecutive quarter. Notably, service exports reached $102.0 billion in Q4 FY2025, the highest recorded for any Q4 of the fiscal year, as stated in the report.
Rural sentiments, as indicated by the Current Situation Index (CSI), saw a slight improvement in January 2025, likely supported by cash flows from the kharif harvest and favorable trends in rabi sowing and output.
Interestingly, the March 2025 round of the RBI’s Urban Consumer Confidence Survey, conducted in 19 major cities, showed an increase in urban consumer sentiments, with the CSI rising to 95.5 from 93.7 in January 2025, the report added.
Point of View
It's essential to recognize India's economic resilience amid global uncertainties. The projected growth of 6.9% in Q4 FY2025 showcases the nation's ability to adapt and thrive, bolstered by improvements in consumer sentiment and strategic investments. Our commitment is to provide accurate and timely analysis that reflects the nation's economic landscape.
NationPress
25/07/2025
Frequently Asked Questions
What is the projected GDP growth for India in Q4 FY2025?
India's GDP growth is expected to reach 6.9 percent in Q4 FY2025.
How does the GDP growth in Q4 FY2025 compare to Q3 FY2025?
It is an increase from 6.2 percent in Q3 FY2025.
What are the factors affecting India's GDP growth?
Key factors include global uncertainties from US tariffs, consumer sentiment improvements, and agricultural growth.
What role do state-investor meetings play in GDP growth?
These meetings have led to record project announcements, boosting investment activity.
What was the growth rate of service exports in Q4 FY2025?
Service exports grew at a rate of 14.1 percent in Q4 FY2025.
