Economic Growth in India
India's GDP growth over the last decade was among the fastest globally, driven by strong domestic consumption and services sector growth, despite short-term disruptions caused by policy changes like demonetization and GST implementation. The COVID-19 pandemic severely impacted the economy in 2020, but India demonstrated a strong expansion in 2021-2024. The country benefited from favorable demographics, political stability, foreign firms' desire to diversify supply chains away from China, and structural reforms.
In the year 2023, the economic growth in India was 9.19%, compared to 6.39% in 2013 and 7.61% in 2022. It averaged 6.17% over the last decade. For more GDP information, visit our dedicated page.
India GDP Chart
Note: This chart displays Economic Growth (GDP, annual variation in %) for India from 2024 to 2021.
Source: Macrobond.
India GDP Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Economic Growth (GDP, ann. var. %) | 3.9 | -5.8 | 9.7 | 7.6 | 9.2 |
GDP (USD bn) | 2,835 | 2,674 | 3,167 | 3,347 | 3,639 |
GDP (INR bn) | 201,036 | 198,541 | 235,974 | 268,905 | 301,230 |
Economic Growth (Nominal GDP, ann. var. %) | 6.4 | -1.2 | 18.9 | 14.0 | 12.0 |
Agriculture (ann. var. %) | 6.2 | 4.0 | 4.6 | 6.3 | 2.7 |
Services (ann. var. %) | 6.4 | -8.4 | 9.2 | 10.3 | 9.0 |
Economic growth accelerates in October–December
GDP reading: Annual GDP growth rose to 6.2% in October–December (Q3 FY 2024) from 5.6% in July–September. The reading matched market expectations, and helps cement India’s status as the world’s fastest-growing large economy. However, it still marked one of the weakest readings in the post-pandemic era, suggesting the economy is on a downtrend, and was far below the 8% rate that economists say is needed to meet the Prime Minister’s goal of making India a developed country by 2047.
Drivers: Household spending increased 6.9% in October–December, which was above July–September's 5.9% expansion, fueled by the boost to rural consumption from favorable rains and a strong harvest. Moreover, public spending improved to an 8.3% increase (July–September: +3.8% yoy), aided by a post-election bout of expenditure. Furthermore, the contribution of net trade to GDP growth roughly doubled to 2.5 percentage points from 1.2 percentage points; exports of goods and services growth hit an over one-year high of 10.4%, picking up from July–September's 2.5%, driven by IT and financial services. This outweighed a softer drop in imports of goods and services of 1.1% (July–September: -2.5% yoy). Less positively, fixed investment growth fell to 5.7%, marking the weakest reading since January–March 2023 (July–September: +5.8% yoy), potentially weighed on by past interest rate hikes by the Central Bank.
GDP outlook: GDP growth is projected to hit a one-year high in January–March, with strong harvests boosting rural private consumption and recent tax cuts stimulating domestic demand. However, the pace of expansion is seen remaining below the 10-year pre-pandemic average of 6.9%, and will be due in part to a one-off boost from the government squeezing out infrastructure projects to meet capital expenditure targets. In addition, U.S. tariffs pose a downside risk to the outlook.
Panelist insight: Nomura’s Aurodeep Nandi and Sonal Varma said: “In our view, the cyclical growth slowdown still has legs. Urban consumption is likely to remain weak as incomes struggle amid balance sheet stress. Companies are struggling with tepid consumer demand, and private capex faces headwinds from an uncertain global environment, softer domestic demand, higher interest costs and an influx of Chinese imports. As the recent budget confirmed, public capex has peaked, and while not insignificant, the outlay has been kept unchanged at 3.1% of GDP. Meanwhile, the income tax concessions for the middle class are well-intentioned, but may struggle to move the needle much on growth.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Indian GDP projections for the next ten years from a panel of 46 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Indian GDP.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Indian GDP projections.
Want to get access to the full dataset of Indian GDP forecasts? Send an email to info@focus-economics.com.
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