FX.co ★ India GDP Growth Surpasses Expectations

India’s real gross domestic product grew by 7.8% year-on-year in the December quarter of 2025, easing slightly from the upwardly revised six‑quarter high of 8.4% in the previous quarter but remaining well above market expectations of 7.2%. Despite this moderation, India retained the fastest growth rate among G20 economies, underscoring the resilience of its economy to the 50% tariffs imposed by the United States in August. This resilience was supported by higher government spending and GST cuts aimed at bolstering consumer confidence and private investment.

Private consumption rose by 8.7%, accelerating from 8.0% in the previous quarter. In contrast, government expenditure slowed to 4.7% from 6.6% in FY26 Q2, while growth in gross fixed capital formation also moderated, to 7.8% from 8.4%. Net external demand weighed on overall GDP growth: exports increased by 5.6%, but imports grew at a faster pace of 8.6%.

On the back of the latest data, GDP growth for FY2026 was revised up to 7.6%, matching the highest annual growth rate recorded since FY2022.