India Q4 GDP: Experts Predict Growth At 6.7% Triggered By Rural Activity

In the backdrop of India surpassing Japan to become the fourth fastest growing economy, the economic growth for this south Asian nation has likely picked up in the last year, especially with the rising emphasis ‘Make In India’ push.

Gross domestic product (GDP) in Asia's third-largest economy likely grew 6.7 per cent year-on-year in the January-March period up from 6.2 per cent the previous quarter, according to the median forecast from a May 19-23 Reuters poll of 56 economists. Forecasts ranged from 5.8 per cent to 7.5 per cent, according to a Reuters poll.

Expectations from India Q4 FY25 GDP 

"If you look at the real growth momentum ... we are seeing some signs of a pickup on the rural side, by the fact that crop output is better, followed by moderation in inflation pressures," said Gaura Sengupta, Chief Economist at IDFC First Bank, citing a Reuters report.

Echoing similar sentiments, economists at Citi mentioned "resilient (agricultural) activity continues to bode well for rural consumption," adding that they "remain bearish on urban consumption" in the first half of the current fiscal year, with a recovery driven by policy stimulus.

The Reserve Bank of India (RBI) is expected to cut interest rates for a third consecutive meeting in June.

However, Standard Chartered's head of India economic research, Anubhuti Sahay, said any growth improvement was mainly driven by the positive impact of net indirect taxes as subsidy payments were significantly lower during the period, ciing a Reuters report. 

Economic activity as measured by gross value added (GVA), considered a more stable gauge of growth and excludes indirect taxes and subsidies, expanded a modest 6.4 per cent in the first three months of 2025 compared to 6.2 per cent the previous quarter.

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Without stronger domestic demand, GDP growth will continue to rely heavily on government spending, as it has for years, according to Reiuters report. 

Economists also cautioned that erratic US trade policy since the start of the year presents a shaky backdrop for future growth prospects. Meanwhile, a separate Reuters poll taken last month found US tariffs had negatively hit business sentiment, which bodes poorly for a long-expected pickup in corporate spending.

On the other hand, Founder and CEO of Zerodha, Nikhil Kamath, penned on X, “It's amazing that despite all the challenges, we're now the 4th largest economy in the world. Having said that, at the risk of sounding like a spoilsport, GDP comparisons only tell you so much.”

“When you look at important metrics like productivity, labor force participation, and perhaps most importantly, R&D spending, we have a long way to go. India spends just 0.7 per cent of GDP on R&D, while China spends 2.4 per cent, South Korea 4.8 per cent, and Israel 6 per cent.”