India Expects 7% Growth for 2025 on Strong Fundamentals
By Reuters | 06 Dec, 2025

The world's 5th largest economy saw growth accelerate last month on strong consumer spending and front-loading of exports ahead of tariffs.

India’s economic growth will accelerate to at least 7% this year as fundamentals remain robust despite global uncertainties, Finance Minister Nirmala Sitharaman said on Saturday.

“Fundamentals of the economy are strong,” Sitharaman said at the Hindustan Times Leadership Summit in New Delhi, adding that consumer spending was expected to stay resilient, supported by low inflation and recent cuts in goods and services tax rates.

"We saw the growth numbers for the second quarter. I think that will sustain, and overall, this year's growth numbers will be 7 or beyond it as well," she said. Gross domestic product grew 6.5% last fiscal year.

India's economy beat forecasts to grow 8.2% in the three months through September, India's fiscal second quarter, lifted by robust consumer spending and front-loading of production ahead of local festivals and punitive U.S. tariffs.

Still, the Reserve Bank of India cut its key repo rate by 25 basis points on Friday and raised its GDP growth forecast for this fiscal year to 7.3% from 6.8%, while lowering its inflation estimate to 2% from 2.6%.

The world's fifth-largest economy has faced pressure from higher U.S. tariffs imposed by President Donald Trump, widening India's trade deficit and pushing the rupee to a record low.

Global headwinds have prompted Prime Minister Narendra Modi's administration to step up domestic economic reforms, including paring consumer taxes, changing labour rules and easing financial sector regulations.

Sitharaman said investor confidence in the economy’s fundamentals was also driving higher retail participation in stock markets and stronger home-loan demand.

On the rupee, she said, the currency will have to find its own level, adding that exporters were benefiting from its depreciation "coinciding with the recent tariff hikes".

(Reporting by Manoj Kumar; Editing by William Mallard)