MUMBAI (AFP) – India’s economy expanded a little over six per cent in the December quarter, official data showed, marking an uptick from the July-September period.
The figures will likely be welcomed by policymakers in the world’s fifth-largest economy, which has been grappling with unexpectedly sluggish growth as it prepares for the fallout of United States (US) President Donald Trump’s protectionist trade policies.
Data from India’s Statistics Ministry showed that gross domestic product grew 6.2 per cent in the three months to December, when compared to the same period last year, largely matching analyst expectations.
The reading also comes well above the revised 5.6 per cent year-on-year growth recorded in the previous quarter.
India also slightly revised upwards its growth projection for the fiscal year through March 2025 to 6.5 per cent, from an earlier forecast of 6.4 per cent.
While growth rebounded in the December quarter, it still remains below the eight-per-cent pace that experts said India needs to create enough well-paying jobs and generate economic prosperity.
Muted urban consumption and lower government spending have taken a toll on economic activity in the world’s most populous country over the last few quarters.
The slowdown has prompted the Indian government to deliver USD12 billion in income tax cuts and the country’s central bank to cut interest rates for the first time in nearly five years.
Adding to India’s woes are the pressures of navigating the impact of reciprocal tariffs that may be imposed by the Trump administration.
Analysts at Nomura have flagged that India’s higher relative tariff rates and its trade surplus with the US place it at risk of reciprocal tariffs.
While details regarding Trump’s ‘eye-for-eye’ tariff plans are still unclear, estimates by SBI Research suggest India’s gross domestic product could see a 50 basis point hit if the US slapped a 20-per-cent flat tariff on the country’s exports.
New Delhi has been quick to respond so far, preemptively cutting tariffs on products including high-end motorcycles.
