The Indian economy grew by 7.4 percent in the quarter of January-March (Q4) of FY25, the beating of expectations and marking the strongest quarterly growth of the tax year.
India is expected to maintain a steady 6-6.5 percent on an annual basis (yo-y) real GDP growth in FY26, supported by resilient domestic demand and potential lighting of the softer global prices for crude oil, despite the pressure of recent tariff increases, according to a UBS report.
The report is of the opinion that India is less vulnerable to global commercial shocks compared to more export -reducing Asian economies, because of the exposure to the lower goods and a strong export base of services, which is now good for around 47 percent of total exports.
The policy focus is expected to remain on improving the monetary transmission, after a cumulative 100 BPS repo speed so far this calendar year.
The analysts of the report added that there can be room for an additional 25-50 BPS relaxation if the inflation of low and external risks moisten the growth momentum.
It is expected that tax resistance will also relieve, whereby the central government will probably accelerate its capital expenses.
A reduction in retailing diesel and gasoline prices prior to Diwali and the Bihar State elections in October-November can further stimulate the household disposable income, which offered extra support to consumption, the report added.
The Indian economy grew by 7.4 percent in the quarter of January-March (Q4) of FY25, the beating of expectations and marking the strongest quarterly growth of the tax year. This was a sharp increase compared to the 6.2 percent registered in the previous quarter.
Various experts have stated that the robust GDP number of the Indian economy in the fourth quarter of the tax year 2025 is attributed to strong domestic consumption, government investments and a relatively lower dependence on export.
Chief Economic Advisor (CEA) Dr. Anantha Negeswaran expressed confidence in the resilience of the economy and stated that the Indian economy is in good condition despite the challenging global environment.
India is ready to lead the world economy again, with the International Monetary Fund (IMF) projecting it as the fastest growing large economy in the next two years.
According to the April 2025 edition of the IMF’s World Economic Outlook, the Indian economy is expected to grow by 6.2 percent in 2025 and 6.3 percent in 2026, maintaining a solid lead on global and regional colleagues.
Published on July 26, 2025
#India #preserve #yoreal #GDP #growth #FY26 #midst #supporting #domestic #question #UBS