India’s economy has firmly established its growth momentum, the numbers say. Emerging as stronger, broad-based, and more resilient amid a challenging global environment, India is the growth story the world is looking at. Official macroeconomic indicators released through the year 2025 reflect an economy that not only weathered global volatility but also capitalised on domestic demand, policy stability, and infrastructure-led expansion to reinforce its position as the world’s fastest-growing major economy.
FGDP Growth Rebounds Sharply in 2025
The most striking feature of India’s economic performance during 2025 has been the strong rebound in gross domestic product growth in the first half of FY2025–26. Real GDP expanded by 8.0 per cent year-on-year during April–September 2025, a significant improvement over the 6.1 per cent growth recorded in the corresponding period of FY2024–25. This acceleration followed a moderation in full-year growth to 6.5 per cent in FY2024–25, after the high base of 9.2 per cent achieved in FY2023–24, indicating a clear return to a higher growth trajectory.
Quarterly data released during calendar year 2025 further underline the strengthening momentum. Real GDP growth rose to 7.8 per cent in the first quarter of FY2025–26 (April–June 2025), compared to 6.5 per cent in Q1 FY2024–25. The pace quickened further in the second quarter, with growth reaching 8.2 per cent during July–September 2025, up sharply from 5.6 per cent in Q2 FY2024–25. Nominal GDP growth also remained firm through 2025, expanding by 8.8 per cent in Q1 FY2025–26 and 8.7 per cent in Q2 FY2025–26, reflecting sustained economic activity and income expansion.
Broad-Based Sectoral Performance Strengthens the Economy
GDP Growth during 2025 was notable for its balanced sectoral composition. Agriculture and allied activities provided stability, registering steady growth in the range of 3 to 4 per cent. The sector expanded by 3.7 per cent in Q1 FY2025–26 and 3.5 per cent in Q2 FY2025–26, supporting rural incomes and overall consumption during the year.
Industrial activity witnessed a strong revival in 2025, led by manufacturing, which grew at around 9 per cent during the first half of FY2025–26. Manufacturing output increased by 9.1 per cent in Q2 FY2025–26 alone, reflecting rising capacity utilisation and improving demand conditions. Construction activity also remained robust, recording growth of about 7 per cent, with a 7.2 per cent expansion in Q2 FY2025–26, underpinned by sustained infrastructure spending.
The services sector continued to anchor India’s growth story throughout calendar year 2025. Services output expanded in the range of 9 to 10 per cent, with growth of 9.3 per cent in Q1 FY2025–26 and 9.2 per cent in Q2 FY2025–26. Taken together, data for April–September 2025 show the secondary sector growing by 7.6 per cent, the tertiary sector by 9.3 per cent, and the primary sector by around 2.9 per cent, underscoring the broad-based nature of the economic upswing.
Employment and Exports Set New Records
The acceleration in economic activity during 2025 translated into tangible gains in employment generation. Formal job creation reached historic levels, with Employees’ Provident Fund Organisation data showing a record net addition of 21.9 lakh members in June 2025, a year-on-year increase of 13.5 per cent. This was followed by net additions of 21.04 lakh members in July 2025, reflecting a 5.6 per cent rise. Notably, over 60 per cent of new subscribers during 2025 were in the 18–25 age group, pointing to expanding opportunities for youth in the organised sector.
India’s export performance also remained strong through calendar year 2025. After reaching a record $825.25 billion in FY2024–25, representing growth of 6.05 per cent, exports sustained momentum in the current fiscal. During April–September 2025, exports totalled $418.91 billion, marking the highest-ever export value for the first half of a financial year. Services exports were a key driver, reaching $199.03 billion during the first two quarters of FY2025–26, reflecting growth of 9.3 per cent.
Domestic Demand and Investment Momentum Hold Firm
Domestic demand remained resilient throughout 2025, supported by stable prices and rising incomes. Private Final Consumption Expenditure grew by 7.0 per cent in Q1 FY2025–26 and accelerated to 7.9 per cent in Q2 FY2025–26, aided by festive-season demand and improving consumer sentiment. Government consumption also contributed positively, registering nominal growth of 9.7 per cent in the first quarter of FY2025–26.
Investment activity continued to strengthen during the year. Gross Fixed Capital Formation rose by 7.8 per cent in Q1 FY2025–26, reflecting improved investment confidence. Foreign Direct Investment inflows remained robust, reaching $80.62 billion in FY2024–25, the highest level in three years, and rising further to $50.36 billion during April–September 2025, a year-on-year increase of 16 per cent. Infrastructure development gained further momentum under PM GatiShakti, with more than 3,000 projects worth over ₹76.4 lakh crore approved by mid-2025.
India Maintains Lead Among Major Economies
In the global economic landscape, India’s performance during calendar year 2025 stood out sharply. International projections placed India’s growth at around 6.2 per cent in 2025 and 6.3 per cent in 2026, well above global averages of 2.8 per cent and 3.0 per cent respectively. India continued to outperform major economies such as China, projected to grow at around 4.0 per cent in 2025, and the United States, estimated at 1.8 per cent growth, reinforcing its role as a key engine of global growth.
Policy Support Reinforces the Growth Trajectory
A series of policy measures implemented during FY2024–25 and 2025 provided strong institutional support to the economic expansion. The 14 Production-Linked Incentive schemes, with a total outlay of nearly ₹1.97 lakh crore, had attracted close to ₹1.88 lakh crore in investments by June 2025 and generated around 12.3 lakh jobs, strengthening manufacturing capacity and exports. Regulatory reforms led to the removal of over 47,000 outdated compliances, easing the cost of doing business.
GST rate reductions announced in September 2025 aimed to boost consumption and industry competitiveness. New trade initiatives, including the Export Promotion Mission and trade agreements such as the India–UK pact providing duty-free access on 99 per cent of exports, further strengthened external demand. Elevated capital expenditure in FY2025–26 continued to act as a powerful multiplier, crowding in private investment and building long-term productive capacity.
As 2025 comes to an end, India’s economy stands on a solid and expanding base. The gains achieved during 2024–25 and calendar year 2025 — reflected in stronger GDP growth, rising employment, record exports, resilient consumption and sustained investment — have laid a firm foundation for the next phase of development. With reform momentum intact and a robust project pipeline in place, the outlook for 2026 and beyond remains firmly positive, reinforcing India’s steady progress towards a more developed and globally influential economic future.
