India Shines: Q4 GDP Beats Forecast, Leads FY26 Growth

India Shines Amid Global Uncertainty: Q4 GDP Surpasses Expectations, Poised to Remain Fastest-Growing Major Economy in FY26

Dipanjan Mondal

New Delhi, May 31, 2025:

India’s real gross domestic product (GDP) growth for the fourth quarter (Q4) of financial year 2024-25 (FY25) stood at 7.4 percent, according to data released by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) on Friday. It is higher than the growth seen in the previous three quarters. For the full financial year 2024-25, real GDP growth was 6.5 percent. Despite the global uncertainty, the country continues to outperform many of the world’s larger and key economies.

With this, India remains the fastest-growing major economy in the world. The new GDP data comes as the Narendra Modi government highlights India’s progress towards becoming the world’s fourth-largest economy. According to the International Monetary Fund (IMF), India is likely to overtake Japan by the end of FY26, ranking just behind the United States, China, and Germany. 

India’s FY25 GDP growth print of 6.5 percent shows that the country continues to outperform many of the world’s larger and key economies. Growth in FY26 is expected to be between 6.3 and 6.8 percent, driven by private consumption, a rural rebound, and resilient services exports, Chief Economic Advisor (CEA) V Anantha Nageswaran said on Friday.

The Reserve Bank of India had projected a 7.2 percent GDP growth for the fourth quarter, but the actual growth exceeded expectations, reaching 7.4 percent. Looking ahead to the current financial year (FY26), the RBI has estimated GDP growth at 6.5 percent.

Gross Value Added (GVA) at constant prices, which excludes taxes and subsidies on products, registered a growth of 6.4 percent in FY25. In the fourth quarter, GVA increased by 6.8 percent year-on-year.

Among individual sectors, construction emerged as the top performer, recording a 9.4 percent growth over the year and a notable 10.8 percent surge in Q4. Public administration, defence, and other services expanded by 8.9 percent annually, while the financial, real estate, and professional services segment grew by 7.2 percent.

SBI has also projected a positive outlook for the Indian economy in the current financial year. It expects the country to remain the fastest-growing major economy in FY26, with GDP growth estimated to be in the range of 6.3 percent to 6.5 percent. 

India's economy recorded strong growth in the fourth quarter of FY25, mainly due to a sharp rise in net indirect taxes, stated a report by the State Bank of India. It added, "We believe that the Indian economy is poised to remain the fastest-growing major economy in FY26 (GDP growth expected at 6.3-6.5 per cent)."As per the report, the growth momentum is likely to be supported by strong macroeconomic fundamentals, a robust and healthy financial sector, and sustained focus on long-term development goals. These factors are expected to help India maintain stability even in the face of global uncertainties.