India's Economic Growth Forecast Faces Downturn: ICRA's Insights

ICRA revised India's GDP growth estimates to 6.9% for the quarter ending March 2025, and 6.3% for the fiscal year 2024-25, falling short of NSO's earlier predictions. Factors like uneven private consumption and investment activities are attributed to this decline, despite robust growth in services sector exports.

ICRA has revised its GDP growth estimates for India, projecting a 6.9% expansion for the quarter concluding in March 2025, and a 6.3% growth rate for the fiscal year 2024-25. This falls short of the estimates initially set by the National Statistics Office (NSO) in February.

The NSO had predicted a 6.5% growth for the full fiscal year, requiring a significant 7.6% growth in the March quarter. However, ICRA's analysis suggests that the Indian economy will not meet these expectations, with contributing factors including uneven private consumption and investment activities impacted by tariff-related uncertainties.

Despite the downturn, the services sector continues to show strength, with exports displaying double-digit growth, even as merchandise exports experienced a decline. ICRA's chief economist, Aditi Nayar, highlighted the challenges and uneven economic trends impacting India's fiscal performance.