India’s GDP surges 7.4% in the fourth quarter: Experts credit domestic demand, government push, warning of risk in fiscal 26
Experts responded to the latest figures, and India’s strong GDP growth in the fourth quarter of fiscal 2025 was driven by people spending more at home, stable government investments, and people who do not rely on exports in the country.
India retains the fastest growing major economic title
Manoranjan Sharma, chief economist at religious valuation and ratings, said: “India’s economy grew 6.5% in fiscal 25, which is again aligned with estimates that it once again became the world’s fastest growing major economy. This makes India once again one of the fastest growing major economies in the world. Growth depends on domestic investment and on domestic investment, and on domestic investment, as domestic investment depends on domestic investment.
The Reserve Bank of India (RBI) forecasts a 7.2% increase in the March quarter and a 6.6% increase in the full fiscal year. The central bank now expects GDP growth of 6.5% in fiscal 26, citing expectations for private consumption and stable investment activities.
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Support for private capital expenditures, rural recovery and industry activities
Ranen Banerjee, partner and leader of PwC India Economic Consulting, described 6.5% GDP growth as a “strong result” amid the global challenge. “Manufacturing growth in printing is a worrying issue, especially given trade-related disruption and global economic slowdown expected in the fiscal year 26,” the ANI report said.
He also stressed that as government capital expenditures remained largely stable over the previous year, the total fixed capital formation of total fixed capital formation increased by 8.8%.
Anshuman Magazine, chairman and CEO of India’s CBRE, Southeast Asia, the Middle East and Africa, said the growth that exceeded expectations demonstrates India’s resilience. “Growth highlights strong domestic demand, recycling in rural markets and a positive industrial sector. The adaptability of the economy is evident in a wide range of industry growth,” he said.
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He added that increased activity in the construction and finance sectors has eliminated investor sentiment in the real estate sector and boosted home buyers’ confidence.
Madhavi Arora, chief economist at Emkay Global Financial Services, said the growth in the March quarter partly reflects public capital expenditures at the end of the fiscal year.
She warned that fiscal 26 could face challenges due to global uncertainty and softening of urban income. “Capital formation remains stable, but fiscal 26 may face challenges due to global uncertainty affecting investment sentiment and the impact of softer urban income on private consumption,” she said.
Careful about the outlook for fiscal 26
Although India’s fiscal 25 growth has surpassed forecasts and strengthened its position as a global running destination, economists remain cautious about fiscal 26 economists due to global headwinds and domestic demand issues. Nevertheless, broad recovery and ongoing policy drives remain a key buffer to the economy.
(Input with ANI)
