India GDP Q4 FY25 grows 7.4%, beats RBI 7.2%

The headline print and why it matters

India’s real gross domestic product (GDP) growth for the January to March quarter (Q4) of FY25 came in at 7.4%, according to data released by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). The number landed above several pre-release expectations and also exceeded the Reserve Bank of India’s (RBI) projection for the quarter. In a macro environment where investors track growth momentum alongside inflation and liquidity conditions, a higher-than-expected print can influence rate expectations and sector sentiment. The data also provides detail on which parts of the economy carried growth during the quarter. In Q4 FY25, services and construction stood out in the official sectoral break-up. The release also included gross value added (GVA) growth, a key measure that strips out net taxes on products.

Key GDP and full-year numbers from NSO

The NSO data pegged real GDP growth at 7.4% in Q4 FY25. For the full financial year FY25, real GDP growth was stated at 6.5% on a provisional basis. This full-year number was slightly below the RBI’s projection of 6.6% for FY25, as cited alongside the release. The RBI had forecast Q4 growth at 7.2%, but the actual print came in higher at 7.4%. The data also noted that Q4 FY25 growth of 7.4% was lower than 8.4% in the same period last year. Still, the quarter’s performance was described as better than expected in the context of pre-release forecasts mentioned by multiple economists and research houses.

How the result compared with pre-release expectations

Ahead of the GDP release, several forecasts pointed to a wide range. One set of estimates cited expected growth anywhere between 6.4% and 7.2% in the January to March 2025 quarter, with full-year FY25 growth expected at 6.3% to 6.4% by “most experts” referenced in the material. Ratings agency ICRA, as cited, expected Q4 FY25 GDP growth at 6.9% (versus 6.2% in the previous quarter) and GVA growth at 6.3%. Economist Teresa John of Nirmal Bang was cited estimating Q4 FY25 GDP growth at 6% and GVA growth at 6.2%, and also cutting her FY25 GDP estimate to 6% from 6.2%. Barclays was cited expecting Q4 GDP growth at 7.2% and estimating agriculture GVA growth at 5.8% year-on-year in Q4, accelerating from 5.6% in Q3, supported by crop production estimates indicating record high wheat production. Against this backdrop, NSO’s 7.4% print came in at the top end of the stated forecast band and above several widely tracked projections.

Sector drivers: services, construction, industry, agriculture

The March-quarter growth was described as being driven by a strong services sector performance, with services expanding by 7.3%. Industry saw a notable recovery, led by construction, which was reported at 10.8% growth in Q4. The agriculture sector sustained positive growth, posting 5.4% in the quarter in one part of the provided material. Separately, the primary sector (agriculture and related activities) was also cited at 5.0% growth in Q4, compared to 0.8% in the same quarter last year, indicating stronger year-on-year momentum off a low base. The construction segment’s strength featured repeatedly as the standout contributor in the sectoral narrative. The combination of resilient services and a sharp pick-up in construction activity helped lift the overall GDP number above expectations.

GVA details and what they signal

On the supply side, GVA at constant prices grew 6.4% in FY25, according to the NSO data cited. In Q4, GVA growth was 6.8% year-on-year. A key point for readers is that GVA excludes taxes and subsidies on products, which can create a gap between GDP and GVA growth in a given quarter. The Q4 GVA figure, along with stronger performances in manufacturing, construction, and financial, real estate, and professional services, was cited as a driver of the quarter’s performance. The quarter’s GDP growth coming in above the RBI’s projection also suggests that activity momentum in the measured sectors and net tax components did not soften as much as some estimates implied.

Construction and key services segments in focus

Construction led the growth profile in FY25, rising 9.4% over the year and 10.8% in Q4. Public administration, defence, and other services grew 8.9% for the year, and was cited at 8.7% growth in Q4. Financial, real estate, and professional services grew 7.2% over FY25 and 7.8% in Q4. These numbers highlight that government-related services and market-linked services both contributed, alongside a construction upcycle. The construction segment’s strength matters because it has spillovers into cement, steel, capital goods, and employment-intensive activities.

Primary sector improvement versus last year

The primary sector, comprising agriculture and related activities, posted 4.4% annual growth in FY25, improving from 2.7% in the previous year. For Q4, the primary sector was reported to have grown 5.0%, versus 0.8% in the same quarter last year, showing a meaningful rebound on a low base. This improvement was also linked, in one economist estimate, to robust Kharif output and a favourable base effect. Stronger rural and farm-side momentum can influence consumption patterns and certain FMCG and two-wheeler demand indicators, though the release itself focuses on national accounts aggregates rather than high-frequency demand detail.

Summary table: Q4 FY25 and FY25 headline metrics

Looking ahead: FY26 expectations cited by economists

Separately, the material also captured expectations for a different period, where economists anticipated headline growth easing from 7.8% in Q3FY26 while staying robust around 7.2% (median estimate). Forecasts for Q4 GDP growth in that context ranged between 6.7% and 7.4%. In its second advance estimate, the NSO pegged FY26 growth at 7.6%, which was said to imply growth of about 7.3% in Q4. Gaura Sengupta, chief economist at IDFC First Bank, estimated Q4 GDP growth at 7.4% and full-year growth at 7.6%, in line with the advance estimate. These forward-looking references underline how closely markets track quarterly GDP for confirmation of momentum versus forecasts.

Conclusion

India’s Q4 FY25 GDP growth at 7.4% came in stronger than several projections and above the RBI’s 7.2% estimate for the quarter, while FY25 full-year growth was pegged at 6.5%. The sectoral picture showed construction as the standout, supported by steady services and improved primary-sector growth compared with last year. The next key checkpoints for investors will be how subsequent revisions evolve and how upcoming official estimates and forecasts reconcile with high-frequency indicators and sector performance in later quarters.