India’s Economic Growth Hits 4-Year Low of 6.5% in FY25, NSO Data Shows
India’s economic growth slowed to 6.5% in the financial year 2024-25, marking the country’s weakest expansion in four years, according to official data released by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation on Friday.
The full-year growth figure represents a significant deceleration from previous years and indicates a cooling of overall economic activity, though the final quarter showed signs of recovery with 7.4% growth in the March quarter.
The Ministry of Statistics and Programme Implementation confirmed the growth figures in its official statement released Friday.
“Real GDP has been estimated to grow by 6.5% in FY 2024-25. Nominal GDP has witnessed a growth rate of 9.8% in FY 2024-25,” the government announced.
The ministry also revised its earlier forecast for nominal GDP growth slightly downward from the previously projected 9.9% to 9.8%.
Despite the overall annual slowdown, the final quarter of FY25 painted a more optimistic picture for the Indian economy.
Real GDP growth for the March quarter (Q4) stood at 7.4%, representing the fastest growth rate among all four quarters of the financial year. This acceleration suggests potential momentum building for the new fiscal year.
Nominal GDP growth for the same quarter reached 10.8%, indicating robust economic activity in the final months of FY25.
Dr. Manoranjan Sharma, Chief Economist at Infomerics Valuations and Ratings Ltd, provided context for the mixed economic signals.
“While external uncertainties—such as supply chain disruptions and energy market volatility—pose challenges, India continues to benefit from strong service sector performance, a stable banking system, and improving manufacturing output under schemes like PLI,” Sharma explained.
The Production Linked Incentive (PLI) scheme reference highlights government efforts to boost manufacturing sector performance through targeted policy interventions.
The 6.5% growth rate marks India’s slowest economic expansion since the immediate aftermath of the COVID-19 pandemic, when the economy was recovering from severe disruptions.
During the pandemic recovery years, India recorded much higher growth rates as economic activity normalized and pent-up demand drove consumption and investment.
The current slowdown reflects a normalization of growth patterns after the exceptional post-pandemic rebound period.
While comprehensive sectoral data wasn’t detailed in the NSO release, expert commentary suggests varied performance across different segments of the economy.
The service sector appears to have maintained strong performance, continuing its role as a key driver of Indian economic growth. The banking system’s stability has provided crucial support for economic activity throughout the year.
Manufacturing output has shown improvement, particularly benefiting from government policy initiatives designed to boost domestic production capabilities.
The economic performance occurred against a backdrop of significant global challenges that affected India’s growth trajectory.
Supply chain disruptions continued to impact various sectors, while energy market volatility created cost pressures for businesses and consumers alike.
These external factors contributed to the overall moderation in economic growth rates compared to previous years.
The mixed growth signals present both challenges and opportunities for policymakers as they navigate economic management in the new financial year.
The strong Q4 performance suggests that policy measures and market dynamics may be aligning to support improved economic momentum.
However, the overall annual slowdown indicates the need for continued focus on addressing structural challenges and external vulnerabilities.
