India’s economy has continued to demonstrate remarkable resilience in the face of escalating global trade tensions and geopolitical uncertainties, as highlighted in the Reserve Bank of India’s (RBI) latest bulletin released in March 2025. Amidst a complex global backdrop, where the Organisation for Economic Co-operation and Development (OECD) forecasts slowing global GDP growth rates of 3.1% for 2025 and 3.0% for 2026, India’s economy is projected to grow at an impressive 6.5% for FY 2024-25, buoyed by strong private consumption, strategic government spending, and diversified growth sectors.
The bulletin reveals that the country’s headline Consumer Price Index (CPI) inflation fell to a seven-month low of 3.6% in February 2025, largely driven by declining food prices, particularly vegetables. However, core inflation excluding food and fuel remains elevated at 4.1%, reflecting persistent price pressures that policymakers must continue to monitor. Manufacturing employment expanded at the second-fastest rate since PMI records began, with services employment also experiencing significant growth, underpinning strong demand and historic low urban unemployment rates of 6.4%.
India’s external trade sector reflects nuanced dynamics. From April 2024 to February 2025, exports grew marginally by 0.1% to reach USD 395.6 billion, despite a 10.9% year-on-year decline in February 2025 due to weak global demand and base effects. Electronics, engineering goods, and pharmaceuticals emerged as top-performing export categories, with declines seen in petroleum products, chemicals, and gems and jewelry sectors. Imports, on the other hand, increased by 5.7% to USD 656.7 billion during the same period, driven by strong demand for electronics and machinery, though February 2025 recorded a significant drop of 16.3%, contributing to a narrowing trade deficit. Gold and oil imports experienced sharp declines, marking notable shifts in domestic investment trends.
The agriculture sector has achieved record production figures, with foodgrain output expected to reach 330.9 million tonnes in 2024-25, up 4.8% from the previous fiscal year. Wheat production alone is set to hit a historic high of 115.4 million tonnes, a 1.9% increase. While car and motorcycle sales declined due to weaker demand, tractor sales showed robust double-digit growth, indicating strength in rural economic demand.
Infrastructure development continued to play a pivotal role in India’s economic strategy. Toll collections and E-way bills have recorded double-digit growth, signaling sustained momentum in infrastructure activity and government spending. This aligns with broader efforts to bolster domestic economic resilience, particularly in light of foreign portfolio investor outflows and currency depreciation risks. The rupee faced depreciation pressures amidst volatile global conditions, though domestic investor activity and stabilizing market ownership have mitigated some risks.
In financial policy measures, the RBI employed effective liquidity management strategies, including open market operations (OMO), repo auctions, and dollar/rupee swaps. Over INR 553.8 billion has been injected through various auction mechanisms during Q4 FY 2024-25, ensuring stable domestic liquidity against the backdrop of capital outflows.
Globally, oil prices have witnessed a 15% decline since mid-January 2025, dropping below USD 70, while gold prices surged to a record high of USD 3000 per ounce, reflecting the market’s flight to safety amidst ongoing uncertainties. The automobile sector reflects contrasting trends, with rural demand for tractors surging even as overall vehicle registrations and transport vehicle sales faced declines.
India’s economic strategy remains focused on leveraging domestic strengths while navigating global challenges. Sustained investments in agriculture, infrastructure, and manufacturing underpin its robust GDP growth. The narrowing trade deficit, supported by declining imports and strategic export sector performance, offers a stabilizing influence amidst external uncertainties.
As India continues its trajectory toward economic resilience and stability, challenges like foreign capital outflows, currency risks, and global volatility remain critical areas for policymaker intervention. This reinforces India’s standing as a steadfast player in the global economic arena, demonstrating that despite turbulent conditions, strong domestic fundamentals and strategic government initiatives pave the path forward for sustained growth.
