India GDP Grows 7.4% in Q4 FY25, But Annual Growth Slows to Four-Year Low

India's economic growth surged to 7.4% in the fourth quarter of FY25, surpassing expectations. However, this sharp acceleration wasn't enough to prevent the full-year GDP from slipping to a four-year low of 6.5%, down from 9.2% in FY24.

Market Performance

India continues to hold its ground as one of the fastest-growing major economies despite global uncertainties and geopolitical tensions disrupting trade worldwide. While the quarterly performance was strong, the annual growth marked the slowest pace since the onset of the pandemic.

• Q4 GDP Growth (FY25): 7.4%
• Full-Year GDP Growth (FY25): 6.5%
• Previous Year (FY24) GDP Growth: 9.2%

Despite global headwinds, the Indian economy showed resilience, supported by rural demand and government expenditure.

Main News

The final quarter of FY25 was bolstered by:

• Robust industrial activity
• Sustained rural demand
• Higher government spending

Notably, the growth in Q4 outpaced the 6.2% growth in Q3 FY25, which was also revised upwards from an earlier estimate of 5.6%.

Meanwhile, the gross value added (GVA), which excludes taxes and subsidies, stood at 6.4% in the fourth quarter.

Private consumption played a crucial role, rising by 7.2% YoY, up from 5.6% in FY24. The jump is attributed to better food price stability and increased spending during the festival season.

Company Details (Sector-Wise Performance)

Agriculture

• FY25 Growth: 4.6% (up from 2.7% in FY24)
• Q4FY25 Growth: 5.4% (up from 0.9% in Q4FY24)

Manufacturing

• FY25 Growth: 4.5% (down from 12.3% in FY24)
• Q4FY25 Growth: 4.8% (down from 11.3% in Q4FY24)

Construction

• FY25 Growth: 9.4% (down from 10.4% in FY24)
• Q4FY25 Growth: 10.8% (up from 8.7% in Q4FY24)

The construction sector showed notable improvement in the last quarter, indicating sustained infrastructure activity despite a moderate annual decline.

Summary of the Article

While India's GDP growth rebounded strongly in Q4 FY25, the overall economic expansion for the year dropped to its lowest since the COVID-19 era. A combination of global tensions and cautious private investment impacted annual performance. Yet, India retained its momentum thanks to improved agriculture output, construction growth, and a significant rise in private consumption.

The country remains firmly on track to be among the fastest-growing economies, with an expanding economic footprint likely to surpass major global peers in size and output in the coming years.