India’s Economic Growth Exceeds Projections in Last Quarter of Fiscal Year
India’s economy recorded a stronger-than-expected growth rate in the final quarter of the fiscal year, driven by a moderate recovery in agricultural activity and a notable rise in investment, despite rising global economic uncertainty.
According to a statement released by the Ministry of Statistics on Friday, India’s gross domestic product (GDP) expanded by 7.4% in the three months ending in March 2025, compared to the same period last year. This figure significantly exceeded economists’ forecasts of 6.7%, as reported in a Reuters poll.
This performance marks the highest quarterly growth recorded in fiscal year 2025, accelerating from a 6.2% increase in the previous quarter. For the full fiscal year ending in March, the economy grew by 6.5%, in line with the government’s estimates published in February.
The stronger economic performance had an immediate impact on financial markets, with the yield on the benchmark 10-year government bond rising by two basis points to 6.27%, according to Bloomberg News.
India’s growth momentum has remained relatively resilient, supported by robust domestic consumption and limited dependence on exports—factors that have helped buffer the country against the adverse effects of global trade tensions, particularly under U.S. President Donald Trump’s shifting trade policies.
Last month, the Trump administration imposed 26% retaliatory tariffs on Indian imports, as part of a broader trade policy affecting over 180 countries. However, the tariffs were temporarily suspended for 90 days, allowing nations—including India—to negotiate trade terms with the United States. A basic 10% tariff remains in effect during this negotiation window.
Meanwhile, government data shows that India currently holds a trade surplus of approximately $46 billion with the United States. Some analysts believe that New Delhi may soon follow China and the United Kingdom in striking a new trade agreement with Washington. Recent reports indicated that President Trump acknowledged India’s willingness to eliminate tariffs on all American imports.
On the monetary policy front, the Reserve Bank of India (RBI) lowered interest rates last month for the second consecutive time, bringing the benchmark rate down to 6%. The central bank also shifted its monetary stance to “accommodative” in a bid to stimulate growth. Another rate cut is widely anticipated in June.
India’s robust growth in the final quarter highlights the resilience of its economy amid global headwinds. With strong domestic demand and strategic investment activity, the country is well-positioned for continued economic expansion. Supportive monetary policy and the potential for a new U.S.-India trade agreement further enhance the outlook.