India's Economy Shows Resilience: Growth Momentum Picks Up Despite Global Challenges

India's economic growth is gaining momentum in the fourth quarter of FY25, driven by robust export performance and a significant increase in government capital expenditure post-elections. High-frequency indicators suggest an improved growth trajectory, supported by strong rural demand and a rebound in urban consumption. Despite softer export growth due to tariff-related uncertainties, India's economy is estimated to achieve a growth rate of 6.5% for FY25, demonstrating resilience in the face of considerable external headwinds.

 

However, geopolitical tensions, uncertainty over trade policies, and volatility in commodity prices pose risks to the growth outlook. On a positive note, pressure on inflation, including food prices, is easing, which could support further economic expansion. The Indian government's increased spending has been a key factor in boosting economic activity, with nearly 75% of allocated capital expenditure already utilized by January.

 

Source: The Economic Times, Business Standard, CNBC-TV18, Reuters.