India’s Economy Surges 7.4% In January–March, Outperforming Global Peers
India-West News Desk
NEW DELHI – India’s economy grew by 7.4% in the January–March quarter of 2025, significantly exceeding expectations and outperforming other major economies, according to government data released on May 30. The growth, fueled by strong construction and manufacturing activity, beat the 6.7% forecast, and marked a notable acceleration from the revised 6.4% growth in the previous quarter.
This was India’s fastest quarterly GDP growth since early 2024, and cements its status as the world’s fastest-growing major economy, Reuters reported.
“India’s growth is holding up in a growth-scarce environment,” said V. Anantha Nageswaran, India’s chief economic adviser, to Reuters after the data release. He emphasized that India has outpaced other major economies, including China, which posted 5.4% growth in the same quarter.
The data showed that manufacturing output rose by 4.8% year-on-year, up from 3.6% in the previous quarter, while construction activity surged by 10.8%, compared to 7.9% previously.
However, some sectors showed signs of moderation. Private consumption, which accounts for over half of India’s GDP, slowed to 6%, down from an 8.1% expansion in the previous quarter. While urban demand weakened, rural consumption picked up, especially in durable goods and farm equipment like tractors.
Meanwhile, government spending dropped 1.8%, after growing 9.3% in the previous quarter. Still, capital investment climbed by 9.4%, although uncertainty around global trade and tariffs may slow private sector investments in the coming months.
One key concern is the threat of new U.S. tariffs. President Donald Trump has proposed 26% reciprocal tariffs on Indian imports, which could disrupt India’s export sector. These tariffs are currently on hold until July 9, as trade negotiations continue (Reuters).
Despite the external risks, a favorable monsoon outlook and easing inflation — with retail inflation falling to a near six-year low of 3.16% in April — may provide room for the Reserve Bank of India (RBI) to cut interest rates again in the coming months, Reuters said.
