Indian tourists and Kashmiris run near the Clock Tower (Ghananta Ghar) in Srinagar, Jammu and Kashmir on May 28, 2025.
Firdous Nazir | Nurphoto | Getty images
Despite increasing global economic uncertainty, India’s economy expanded at a rapidly expected annual rate of 7.4% in the end of March.
Print for the government’s fourth quarter GDP of the government’s financial year 2025 came faster than the forecast of an increase by economists in a Reuters Poll.
It marked the strongest quarterly growth in the financial year of 2025, according to which Government data released on Friday,
India’s economy expanded 6.5% in full financial year 2025 years, Government estimates February,
The development approach to Asia’s third largest economy has been relatively strong, thanks to strong domestic consumption and relatively low dependence on exports, a blow from US President Donald Trump’s irregular trade policy.
Trump called “mutual” last month 26% tariff On goods imported from India as part of comprehensive American trade measures, only to reduce them by 10% 90 days Deal ends in July to allow negotiations.
The White House is resorting to protectionist trade policies to address trade imbalances. India Around $ 46 billion run According to government data, surplus with the US in 2024.
After Washington’s agreements with China and UK Trump, New Delhi may be in queue to make a deal with America It was reportedly stated earlier this month That India offered zero tariffs on all American imports.
monetary policy
India’s economy is benefiting from the steps of the Reserve Bank of India to relax monetary policies. The Central Bank cut interest rates up to 6% for the second consecutive time last month and moved its stance to adjust to an increase in a bid. The central bank is expected to cut another rate in June.
“Dealling inflation, negative risk to increase to another cut for the repo rate next week, said that the economist of the sub -major emerging markets in capital economics said, the repo rate will fall to 5.5% in the current intuition cycle.
The market concerns had climbed on the tensions emerging between India and neighboring Pakistan, which took military action earlier this month. Shah said that the ceasefire in Kashmir contesting regions “can easily build delicate and stress,” that in turn can withdraw investment and consumption, Shah said.
He said, India’s development story can still be caught, which helps in improving consumer demand in rural areas. Consumption contributed more than half of India’s economy, in which accounting for rural areas About 40% of the sale of overall consumer goods In the first quarter of 2025, the data of the market research firm Nielseniq showed.
International Monetary Fund Projects will reach India’s economy to $ 4.187 trillion in 2025, marginally surrounds Japan’s $ 4.186 trillion and potentially ahead Making it the fourth largest economy in the world,
Shah said, “India was always going to overtake Japan – and Germany too – looking at its positive demographics and scope of constant productivity gains,” saying that “there is not a stretch to think that, until 2040, India’s economy can be the size of Germany and Japan (economy).”
