India’s GDP rebounds to 6.2% in Q3, full-year growth forecast raised to 6.5%

India's economy regained momentum in the December quarter, with its GDP growing at 6.2%, after slipping to a seven-quarter low of 5.6% in the preceding July-September period, according to data released on Friday.

According to the government of India data, the uptick in economic expansion was driven by a revival in rural consumption, supported by a favourable monsoon, and increased government expenditure. However, there are still headwinds to be accounted for, especially over trade uncertainties, particularly the risk of fresh U.S. tariffs under the new Donald Trump administration, which could weigh in on India's external trade.

India’s GDP growth trajectory had slowed to a near two-year low of 5.6% in the second quarter, raising concerns about economic momentum. The government had projected 6.4% growth in its first advance estimate.

According to the government, India remains on track to maintain robust expansion, reinforcing its ambition to emerge as the world’s third-largest economy by 2030.

Growth Forecast

The government has also revised its full-year GDP growth projection for FY25 upward to 6.5%, while nominal GDP is now expected to expand by 9.9%, reflecting a stronger-than-anticipated economic trajectory.

As per the Ministry of Statistics, these figures mark an improvement from the First Advance Estimates, underscoring resilience amid global trade uncertainties and inflationary pressures.

FY24 Growth Hits 12-Year High

As per the First Revised Estimates, India’s real GDP surged by 9.2% in the financial year 2023-24—the highest in the past 12 years, barring the post-pandemic rebound of FY22.

This expansion was driven by double-digit growth in key sectors, including manufacturing (12.3%), construction (10.4%), and financial, real estate, and professional services (10.3%), the Ministry of Statistics noted in its statement.

Additionally, the final estimates for FY23 peg GDP growth at 7.6%, supported by strong performances in trade, hotels, transport, communication, and broadcasting services (12.3%), along with financial, real estate, and professional services (10.8%).

Sectoral Growth Trends in FY25

The government projects continued expansion across major sectors in FY25, with the construction sector expected to grow at 8.6%, financial, real estate, and professional services at 7.2%, and trade, hotels, transport, communication, and broadcasting services at 6.4%.

Private Final Consumption Expenditure (PFCE), a key indicator of domestic demand, is forecast to rise by 7.6%—a sharp improvement from 5.6% in FY24.

The latest data indicates that despite external risks, including potential trade restrictions and global economic slowdowns, India’s economic fundamentals remain robust.

With an upward revision in GDP estimates and a continued push in infrastructure and consumption, the country is poised to maintain its growth trajectory, reinforcing its ambitions to emerge as the world’s third-largest economy by 2030, the ministry noted.