India’s Economy Expected to Grow at 6.5% in Fiscal Year 2024/25
India’s economy is projected to grow at around 6.5% in fiscal year 2024/25, which is closer to the lower end of its 6.5%-7% projection, due to global uncertainties that pose a dampening threat, according to the government. The growth outlook for October to December appears bright, with rural demand remaining resilient and urban demand picking up in the first two months of the quarter, according to the finance ministry’s monthly economic report for November.
Growth slowed more than expected in July to September, hampered by weaker expansion in manufacturing and consumption. India has maintained that its economy will grow at a world-beating pace of 6.5%-7% despite a challenging environment. The outlook is expected to be better in October-to-March than in the first six months of the financial year.
The report also mentioned that the combination of monetary policy stance and macroprudential measures by the central bank may have contributed to the demand slowdown. India’s central bank has kept interest rates unchanged for 11 straight policy meetings, despite calls for rate cuts to support growth amid high inflation.
For the next financial year starting April 1, 2026, the report said that newer risks have emerged, such as uncertain global trade growth and a stronger U.S. dollar. The election of U.S. President-elect Donald Trump has threatened many nations, including India, with higher tariffs on imports, raising risks of a global trade war after he takes office on January 20. Trump’s election victory has also fuelled a run-up in the dollar and U.S. yields.
However, India’s growth outlook in 2025/26 and coming years is bright in terms of domestic economic fundamentals, the finance ministry’s report said.
