India’s economic growth outlook: Ind-Ra forecasts 6.5% in FY25 amidst government push and corporate optimism

India’s economic landscape is poised for a growth trajectory, with India Ratings and Research (Ind-Ra) projecting a 6.5% GDP growth in the fiscal year 2025. The report, released on Thursday, attributes this optimistic forecast to the government’s capital expenditure initiatives, favorable trends in global commodity prices, and a robust corporate performance. While this projection marks a positive trajectory, it diverges from the Reserve Bank of India’s (RBI) slightly higher forecast of 7% for the same period.

One of the key drivers identified by Ind-Ra for India’s anticipated economic growth is the government’s significant capital expenditure push. The report underscores the pivotal role of government initiatives in propelling economic activities, fostering development, and stimulating overall growth.


Global commodity prices exhibit a noteworthy softness, contributing to India’s economic resilience. This favorable global trend provides a conducive environment for economic expansion, enabling businesses to operate with cost efficiencies and reinforcing the nation’s economic stability.

Ind-Ra’s report sheds light on the encouraging corporate performance, suggesting a potential resurgence in private sector investments. After a prolonged period of subdued private corporate investments, the report indicates a renewed bullish sentiment among businesses. Lead indicators reflect a growing confidence in private corporate sectors, fostering expectations of a new private corporate capex cycle in the coming fiscal year.

Highlighting the positive shift, the report reveals that the private sector successfully raised Rs 3.56 trillion to fund 982 projects in FY23. This substantial increase compared to the Rs 1.98 trillion raised for 791 projects in FY22 signals a notable uptick in corporate optimism and a willingness to invest in growth-oriented initiatives.

Ind-Ra anticipates a moderation in Gross Value Added (GVA) growth to 6.4% in FY25 from 6.9% in the current fiscal year. Within the GVA sectors, agriculture is expected to witness a growth surge to 3% from 1.8% in FY24. Meanwhile, the industry sector’s growth is projected to ease to 6.5% from 7.9%, and the service sector may experience a slowdown to 7.3% from 7.7% in FY24.

Ind-Ra highlights the potential impact of Wholesale Price Index (WPI) inflation on GVA growth in FY25. With WPI inflation turning positive since November, concerns arise regarding rising input costs affecting corporate margins. The report emphasizes the challenge for producers to pass on higher input costs to output prices, especially in the absence of broad-based consumption.

India’s economic trajectory in FY25 paints a picture of resilience and optimism, fueled by government initiatives, favorable global conditions, and a resurgence in private sector investments. While challenges such as inflationary pressures exist, the overall outlook suggests a positive momentum that could pave the way for sustained economic growth in the coming fiscal year. As India navigates these dynamics, the collaboration between public and private sectors emerges as a key catalyst for shaping a robust economic future.