India’s economy showed signs of slowing down in the January–March quarter of FY25, growing at 7.4%, according to official data released by the government on Friday. This is lower than the 8.4% growth recorded in the same period last year.

The slowdown was also visible in the overall yearly growth numbers. For the full financial year 2024–25, India’s GDP grew by 6.5%, down from a strong 9.2% growth in the previous year (FY24). This suggests that while the economy is still growing steadily, the pace has started to ease.

Interestingly, this data came just days after NITI Aayog CEO BVR Subrahmanyam announced that India had officially overtaken Japan to become the world’s fourth-largest economy. “As I speak, we are now a USD 4 trillion economy,” Subrahmanyam said, citing figures from the International Monetary Fund (IMF).

He also shared that India is now only behind the United States, China, and Germany. “If we continue with the current plans and reforms, we can become the third-largest economy in the world within the next 2.5 to 3 years,” he added.

Recent Economic Performance
Looking back at recent quarters, the economy grew 6.2% in the October–December 2024 quarter, which was higher than the 5.6% recorded in July–September 2024. This growth was driven by strong consumer spending and demand, according to data from the National Statistics Office (NSO). However, the growth in October–December 2023 was significantly higher at 9.5%, showing a clear year-on-year slowdown.

Despite this, the government slightly revised the full-year growth outlook for FY25 upwards—from 6.4% to 6.5%—based on its second advance estimates. This came even after revising last year’s GDP numbers sharply upwards—from 8.2% to 9.2%. That 9.2% growth rate for FY24 is now the second-highest seen in the past 12 years.

Outlook
While the recent figures show that growth is moderating, India’s overall economic story remains positive. With a strong foundation and growing global relevance, experts believe the country is still on track for long-term economic strength, especially if current policies and plans stay on course.