India is poised to conclude 2025 as one of its strongest economic years, with key macroeconomic indicators pointing to robust growth, low inflation, rising exports and improving labour market conditions, according to the government’s year-end economic review.
In a press note released by the Press Information Bureau (PIB), the government said India’s real Gross Domestic Product (GDP) grew by 8.2 per cent in the second quarter of FY 2025–26, marking a six-quarter high. The performance highlights the resilience of domestic demand despite ongoing challenges in the global trade environment.
The Q2 growth follows expansions of 7.8 per cent in Q1 of FY 2025–26 and 7.4 per cent in Q4 of FY 2024–25. Real Gross Value Added (GVA), which reflects domestic production activity, rose by 8.1 per cent in Q2, supported by strong momentum in both the industrial and services sectors.
The government noted that inflation remained well-contained through the year. Consumer Price Index (CPI) inflation eased steadily from 4.26 per cent in January 2025 to 0.71 per cent in November 2025, providing policy space for the Reserve Bank of India (RBI) to maintain a supportive monetary stance. Wholesale Price Index (WPI) inflation also moderated, reinforcing overall price stability.
Labour market conditions showed notable improvement, with the unemployment rate falling to 4.7 per cent in November 2025, down from 5.2 per cent in October, marking the lowest level since April. The decline was broad-based across urban and rural areas, alongside improvements in labour force participation and worker participation rates.
India’s export performance strengthened during the year. Merchandise exports rose to $38.13 billion in November, compared with $36.43 billion in January. Services exports continued to perform strongly, driven by growing global demand for Indian software, business services and other tradable services.
External sector resilience was further supported by strong foreign exchange reserves, steady remittance inflows and improved current account dynamics, helping to contain the current account deficit.
The government described the current phase as a “Goldilocks moment” for the Indian economy — characterised by high growth and low inflation — underpinned by strong domestic demand, structural reforms, supportive monetary conditions and price stability.
With GDP exceeding $4.18 trillion, India has become the world’s fourth-largest economy and is expected to climb further in global rankings. Projections from domestic and international institutions point to sustained economic expansion through 2026 and beyond.
The government reaffirmed its commitment to continuing structural reforms and policy initiatives aimed at maintaining growth momentum while ensuring broader and more inclusive economic development.
