India GDP Outlook Upgraded After 7.8% Q1 Growth

Post by : Bianca Suleiman

India's economy appears to be picking up momentum. A new poll indicates that growth this fiscal year is likely to exceed previous estimates following a stronger-than-expected start and seasonal stimulus tied to festival spending.

Forecasters raised their projections for the second consecutive month after official data revealed a robust 7.8% GDP increase in April–June, well above consensus. The median view from more than 40 economists now places FY2025 growth at 6.7%, up from last month’s 6.6% and markedly higher than the 6.3% forecast published in August.

The revision reflects policy measures such as pre-festival cuts to the Goods and Services Tax (GST), which are anticipated to boost household purchases and retail activity. Alongside easing price pressures and a steady rural recovery, domestic demand is helping to shore up growth in the face of external strains.

That said, significant external risks remain. A 50% tariff still imposed by the United States on certain Indian products is weighing on export prospects. At the same time, warmer diplomatic exchanges between Washington and New Delhi have raised hopes that some trade tensions may abate.

On monetary policy, 68% of respondents expect the Reserve Bank of India to trim rates by 25 basis points in December after keeping the repo rate at 5.50% earlier this month. Economists view a measured cut as a way to bolster activity while inflation stays contained—projected to average around 2.5% this year before edging up next year.

Nevertheless, private investment remains a concern. Companies have been cautious about committing fresh capital amid global uncertainty and evolving trade dynamics, which could limit longer-term job and growth prospects.

For now, the consensus is cautiously positive: the combination of a strong opening quarter and festive-season demand may help India sustain growth through the fiscal year, reinforcing its position as one of the fastest-growing major economies.