India’s economy is exhibiting robust growth momentum, with key indicators pointing to a sustained recovery and expansion. According to a recent report by Motilal Oswal Private Wealth (MOPW), the country’s GDP grew by 7.4% in Q4 FY25, marking the highest quarterly growth in the past year.
📈 Key Growth Drivers
- Inflation Control: Retail inflation has remained below 4% for four consecutive months, providing relief to consumers and boosting purchasing power.
- Tax Revenues: Rising GST collections and strong corporate tax inflows have strengthened the fiscal position.
- Capital Expenditure: Government spending on infrastructure and development projects has exceeded expectations, reaching ₹10.5 trillion in FY25.
- Policy Alignment: Fiscal, monetary, and regulatory policies are now working in tandem to sustain growth momentum.
🏗️ Sectoral Performance
- Services and Construction led the charge, with construction activity growing by 10.8% year-on-year in Q4.
- Manufacturing showed signs of improvement, while private consumption remained steady despite global uncertainties.
- Rural demand held firm, supported by strong wage growth and favorable monsoon forecasts.
🌍 Global Context and Investment Outlook
Despite global headwinds, including tariff concerns and geopolitical tensions, India has benefited from a delay in global tariff implementation and a ceasefire with Pakistan, which improved investor sentiment.
- The MSCI World Index hit record highs, and a weaker Dollar Index is expected to attract more foreign portfolio investments into emerging markets like India.
- The RBI’s recent repo rate cut to 5.5% and phased CRR reduction aim to inject liquidity and support credit growth.
⚠️ Risks to Monitor
While the outlook remains positive, experts caution against:
- A widening trade deficit
- Softening industrial momentum
- Volatile FPI flows and rising global bond yields
Stay tuned for more updates on India’s economic trajectory.
