India's Economy Surges with 7.4% Growth
India's economy expanded at a faster-than-expected rate of 7.4% in the quarter ending March 2025, demonstrating robust resilience amidst global economic uncertainties. This growth surpasses the 6.7% forecast by economists.
Key Drivers of Growth
The surge is largely attributed to strong domestic consumption and a relatively lower dependence on exports. These factors have helped cushion the economy from external pressures, including trade policies and global economic slowdowns.
Fiscal Year Performance
For the full fiscal year 2025, India's economy expanded by 6.5%, aligning with government estimates. This consistent growth underscores the strength and stability of the Indian economy.
Monetary Policy and Future Outlook
The Reserve Bank of India (RBI) has proactively taken steps to bolster growth by implementing consecutive interest rate cuts, bringing the current rate to 6%. This accommodative stance aims to further stimulate economic activity. However, tensions in regions like Kashmir may pose challenges to investment and consumption.
IMF Forecasts India to Overtake Japan
The International Monetary Fund (IMF) projects India's economy to reach $4.187 trillion in 2025, surpassing Japan's $4.186 trillion. This would position India as the world's fourth-largest economy. Experts believe that India's positive demographics and potential for productivity gains will drive continued economic expansion, potentially rivaling the combined economies of Germany and Japan by 2040.