India Clocks 6.5% GDP Growth in FY25; Poised to Overtake Japan as 4th Largest Economy

India’s economy grew 6.5% in FY25, driven by a stronger-than-expected 7.4% expansion in the fourth quarter (January–March 2025), according to data released by the National Statistics Office (NSO) on Friday. The impressive year-end performance lifted the nation’s GDP to USD 3.9 trillion, solidifying India’s position as the world’s fifth-largest economy.

The robust Q4 growth was fueled by rising private consumption, and resilient manufacturing and construction sectors, signaling a broad-based cyclical rebound. This final quarter growth outpaced the 6.4% rise seen in Q3 (October–December 2024), although it remained below the 8.4% surge recorded in Q4 of the previous fiscal (January–March 2024).

With economic momentum building and structural reforms continuing, India is now on track to surpass Japan and become the world’s fourth-largest economy in FY26.

Analysts credit the resilience of domestic demand, strategic infrastructure investments, and improving export trends for supporting growth, even amid global uncertainties. The government is expected to continue policies focused on manufacturing, digital infrastructure, and capital investment to sustain the momentum in the coming fiscal year.