India’s economy grew by 6.5% in the financial year 2024–25, marking the slowest annual growth since the COVID-hit year of 2020–21. The data, released by the government on May 30, 2025, reflects a year of mixed signals—while full-year growth was muted, the economy showed signs of strong recovery in the final quarter.
In the January to March period (Q4), real GDP grew by 7.4%, making it the fastest quarterly growth of the year. This growth was driven largely by a boost in manufacturing and construction activity, alongside improved tax revenues. However, it was slightly slower compared to the 8.4% growth seen during the same quarter last year.
While the strong Q4 helped lift the overall growth rate, experts believe that much of the momentum came from government-led capital expenditure. The private sector, on the other hand, has shown slower investment trends, raising concerns about the long-term sustainability of this growth pattern. Chief Economic Advisor V. Anantha Nageswaran emphasized the need for greater participation from businesses, urging them to invest more in capital formation and ensure rising wages for workers.
Looking ahead to 2025–26, economists estimate the growth to hover between 6.3% and 6.6%. With inflation easing and interest rates expected to remain supportive, the economic outlook remains cautiously optimistic. Despite the year’s slower overall pace, India continues to hold its position as the world’s fastest-growing major economy.
