While the World Struggled, did the Indian economy Hold Its Nerve in June 2025?
- Remin Francis I R
- Jul 4
- 2 min read
If you’ve been watching the news, it may feel like the world economy is spinning with uncertainty, trade wars flaring up, tensions in the Middle East, and inflation refusing to sit still. But amid all this turbulence, India seems to be cruising ahead with remarkable steadiness.
India’s economy grew by 6.5% in 2024-25, and even more impressively, clocked 7.4% growth in the last quarter, making it one of the fastest-growing major economies right now.
What’s driving this?
A combination of robust consumer spending and strong investment. Fixed capital formation, basically what businesses invest in infrastructure and machinery, grew by 9.4%, a jump from the previous quarter.
Agriculture
On the supply side, agriculture continues to be a quiet strength. The 2024–25 season saw record crop production, easing food inflation and keeping prices stable. Headline inflation has stayed below target for four straight months, helped by good rainfall and solid public food stocks.
Industry
Industrial production has seen mixed signals. The Index of Industrial Production (IIP) slowed to 2.7% in April 2025, but manufacturing and steel output held up. Two-wheeler and three-wheeler production rebounded, and India’s services sector remains vibrant, thanks to solid export demand and a hiring uptick.
Consumer
Consumer demand tells two stories. Urban consumption has been a bit soft, passenger vehicle sales dropped in May, but rural demand showed strength, with two-wheeler sales rising 7.3% and strong activity under government job schemes like MGNREGS.
Employment data was a bit of a mixed bag. The all-India unemployment rate ticked up to 5.6% in May, driven by rural job losses and seasonal factors. However, organised sectors like manufacturing and services reported fresh job creation, with over 14% of companies expanding payrolls.
Macro Indicators
On the government front, fiscal management looks disciplined. The fiscal deficit for 2024–25 came in at 4.8% of GDP, slightly better than expected, and tax revenues grew by 9.5%. States, however, saw some fiscal stress, mostly from lower tax transfers from the centre.
Trade
Trade figures were slightly down. Exports in May fell by 2.2%, while imports dropped by 1.7%. However, the trade deficit narrowed slightly compared to a year ago. Services exports, especially software and business services, remained a bright spot.
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