India's GDP showed an uprise of 6.2% in Q3

Ayesha Agrawal

01 Mar 2025 — 2 min read

India's GDP rises by 6.2% in December quarter, Expected economy in FY25 is 6.5%

India's GDP grew by 6.2% in the December quarter backed by key growth factors including increased consumer spending, higher growth expenditure and increased export rates.
Indian economy is expected to maintain a projected growth rate of 6.5% in FY25.
Decreased inflation rates, tax reduction and strong investments stimulates the growth factor of the economy.
V Anantha Nageswaran, Chief Economic Adviser states three possible reasons for the hike in India's GDP.
Chief Economist of Bank of Baroda, Madan Sabnavis stated that the rural economy has performed well and will be one of the supporting factor of growth.

New Delhi: India's economic growth increased significantly to 6.2% in the December quarter (FY25), a great recovery from 5.6% in the September quarter. This indicates that there is still a lot of work that has to be done in the final quarter to achieve the revised growth target of 6.5% in the Fiscal year. Despite achieving this target, the growth rate for FY25 would still be lower than the previous year's 9.2%(Difference of 2.7%).
This notable hike in India's GDP is supported by three major growth factors including increased consumer spending, higher government expenditure, and an increase in export rates.

Chief Economic Adviser, V Anantha Nageswaran says, " Exports are driving growth with exports excluding petroleum, gems, and jewelry growing almost 10% from April to January, government's capital expenditure is on track for the current financial year."

Further, he adds, "The massive gathering of 50-60 crore people in the 'Mahakumbh festival' has led to significant expenditure in January and February that contributes to the GDP."

6.5% Growth rate expected for Indian Economy in FY25

The Indian economy is expected to maintain a projected growth rate of 6.5% in FY25. In support of the statement, Various sectors of the Indian Economy are performing well which contributes to the rise of the country's GDP:

The agricultural sector reported a growth of 5.6% in Q3, FY24
The Manufacturing sector grew by 3.5% in Q3.
The Mining sector increased by 1.35% in the last quarter.
Utility services such as electricity, gas, and water supply grew by 5.2% in the last quarter.
Hospitality and transport services reported a growth of 6.7% in Q3.

According to Madan Sabnavis, Chief Economist at Bank of Baroda, "The sector-wise strong performance indicates a healthy rural economy which is the key factor for driving growth in India's economy and a significant growth can be expected in the coming years."

Economists believe achieving the expected growth rate of 7% might be challenging.

Indian economists believe that India needs to grow 7% or even more in Q4 to achieve the growth rate target of 6.5% in FY25. Global tensions and inflation rate might be a reason for investors to drop off their decisions. It would eventually affect the business and corporate sectors.