India’s economic growth is becoming more balanced, with private consumption playing an increasingly significant role in its GDP. In the third quarter of fiscal year 2024-25 (October-December 2024), the GDP growth accelerated to 6.2%, up from a revised 5.6% in the previous quarter.
Private consumer spending saw a notable increase of 6.9% year-on-year during this period, up from 5.9% in the previous quarter. This surge was buoyed by improved rural demand, attributed to a robust Kharif crop output and the festive season purchases.
Chief Economist at CRISIL, Dharmakirti Joshi, highlighted this shift, stating, “The good news is growth is becoming more balanced as private consumption’s share in GDP rose in fiscal 2025.”
However, despite the financial flexibility and low leverage enjoyed by Indian corporates, corporate sector investments have not been as robust as expected. This is largely due to ongoing tariff wars and concerns over potential product dumping from China, leading to a cautious investment approach.
Overall, the Indian economy is experiencing a more balanced growth trajectory, with private consumption emerging as a key driver. Nonetheless, challenges such as subdued manufacturing performance and global trade uncertainties persist, necessitating continued policy support to sustain this momentum.
