India’s Q3 GDP Growth Rate for 2024-25: Economy Expands by 6.2%

In the third quarter of FY25, from October to December 2024, India’s economy grew by 6.2%. This was faster than the 5.6% growth seen in the previous quarter, from July to September 2024. According to the most recent figures from the National Statistics Office (NSO), the growth was caused by more spending by consumers and the government. But this is a lot less than the 9.5% growth seen in the third quarter of the previous fiscal year (FY24).

Key Highlights of Q3 GDP Data

The economy of India grew by 6.2%. This was faster than the growth of 5.6% seen in the previous quarter, from July to September 2024:

#NewsAlert🚨 | India Q3 GDP Data Live: India’s economy grows 6.2% in Dec quarter; FY25 growth seen at 6.5% 🇮🇳📈

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— Moneycontrol (@moneycontrolcom) February 28, 2025

• GDP growth of 6.2% in Q3 FY25, up from 5.6% in Q2.
• GDP growth in the third quarter of FY24 was 9.5%, which is a lot better than the current quarter.
• Full-Year GDP Estimate for FY25: 6.5%, which is a little higher than the earlier estimate of 6.4%.
• FY24 GDP Growth Revised Upward: 9.2% (previously thought to be 8.2%)

Why is India’s GDP Growing?

Several important things led to steady growth in the economy in Q3:

1. Consumer spending went up: Private final consumption expenditure (PFCE), which is a measure of how much people spend, went up by 7.6%. This means that more goods and services are being bought.
2. More money spent by the government: The government’s final consumption spending (GFCE) rose sharply by 8.3%, compared to only 3.8% in the previous quarter.
3. Export Growth: Between April and January, India’s exports, which include things other than oil and jewelry, grew by almost 10%, which was good for the economy.
4. Strong Performance in Agriculture: The agriculture industry grew by 4.6%, which helped the rural economy grow.
5. More money spent Because of Maha Kumbh: The holy event drew 50–60 crore people, who spent more money, which helped the GDP grow.

Challenges and Concerns

Even though there was growth, there were signs of slowing in some places:

• Manufacturing Growth Slowed Down: Manufacturing growth slowed to 4.3% in FY25, down from 12.3% the previous year.
• Gross Fixed Capital Formation (GFCF) shows that investment slowed from 8.8% last year to 6.1% this year. In Q3, GFCF grew by just 5.7%, which was the least in seven quarters.
• Private vs. Public Investment: Private investment stayed weak, while government capital spending (capex) rose by 5%.

What Needs to Happen in Q4?

Indian needs to grow its GDP by 7.6% in the quarter from January to March 2025 (Q4) in order to meet its FY25 goal of 6.5%. V. Anantha Nageswaran, who is the chief economic adviser, thinks this is possible because

• Strong success in exports
• More money spent on capital by the government
• Big events like the Maha Kumbh cause people to spend more money.

Sector-wise Breakdown of GDP Growth in Q3

1. Farming: 4.6% (high growth because of a good kharif crop)
2. Manufacturing: 3.5%, which is low compared to last year’s 14%.
3. Mining and quarrying: 1.4% (come back from a 0.3% drop in Q2)
4. Building: 8.6%, down from 10.4% the year before.
5. Sector of Services: 7.3% (less than 9% in FY24)
6. 8.8% for government, defense, and other services, the same as last year.
7. 6.4% (less than 7.5% last year) in trade, hotels, transportation, communication, and media
8. 7.2% in financial, real estate, and professional services, which is less than the 10.3% seen last year.

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Economic Risks and Future Outlook

Experts warn that 7.6% growth in Q4 might be hard to achieve because of unstable global economies, heightened geopolitical pressures, and slow private sector investments. But inflation going down (it’s expected to reach 4.5%) could make things cheaper and help the economy grow.

Economists also said that India’s investment-to-GDP ratio dropped to its lowest level in three years, at 31.9%, even though the government spent 47.7% more on capital projects. This means that private business investments are still not strong.

Conclusion

India’s economy is still growing steadily. In Q3 FY25, GDP grew by 6.2%, thanks to more people spending money and the government spending more. There are still worries, though, about weak industry, slow private investments, and global risks. In the coming months, the government may need to increase spending and encourage private capital in order to keep things moving.

India needs to meet its 6.5% GDP goal for the whole year of FY25, and the last quarter (Q4) will be very important in that regard. If exports, capital expenditures, and consumption stay strong, growth of 7.6% in Q4 might be possible, which would mean a good end to the fiscal year.