India’s economy expanded by 7.4% in Q4, slightly below the 8.4% pace from a year ago. For the full year FY25, GDP grew 6.5%, down from 9.2% in FY24, marking a clear step down from the pandemic bounce-back years.
What worked: growth in the last quarter was driven by agriculture, construction, and capital investment.
- Agriculture surprised with 5.4% growth (vs 0.9% last year), thanks to a strong Rabi harvest.
- Construction grew 10.8%, reflecting sustained infra spending.
- Capital formation (investments in plant & machinery) rose 9.4%, showing long-term business confidence.
- Services held steady at 7.3%, led by finance, real estate, and tech.
What didn’t click: manufacturing remains the weak link. It grew 4.8%, but that’s way down from 11.2% in Q4 last year.
The road ahead: most economists expect FY26 growth around 6.3%, with inflation easing to 3.7%. India might be off the post-COVID sugar rush, but it’s still among the fastest-growing major economies in the world and if global winds don’t go rogue, the runway looks reasonably clear.
