India’s economy shows estimated 7.3% growth in July

India’s economy is expected to have grown 7.3% during the July–September 2025 quarter, according to a Reuters poll of 61 economists. The growth appears to be supported mainly by rural spending and strong government expenditure, while private investment remained weak, signalling an uneven economic recovery.

Household consumption, which accounts for around 60% of India’s total GDP, improved compared to the previous quarter. Economists believe this rise was driven by better agricultural output, aiding rural demand. In contrast, urban demand and private capital spending have not shown strong momentum, leaving room for concern regarding the sustainability of growth.

Government spending continued to act as a major driver of economic expansion. Many economists suggest that public capital expenditure and private consumption will likely remain the primary contributors to growth in the short term. However, private sector investment is expected to grow at a slower pace, largely due to global uncertainties.

Economists also noted that the GDP deflator, which adjusts for inflation, was unusually low. This statistical factor boosted real GDP figures, making growth appear stronger than nominal data would suggest. Wholesale price inflation was negligible, and consumer inflation averaged around 2% during the quarter. According to economists cited by Reuters, this deflator effect is likely to remain in place until the end of the current financial year.

According to the same poll, nominal GDP growth may slow to 8.3% in the July–September quarter, down from 8.8% in the previous quarter. Gross Value Added (GVA) another measure of economic activity is estimated to have expanded by around 7.15%. Forecasts for the coming quarters suggest GDP growth may ease to 6.8% in the October–December period and 6.3% in the quarter ending March 2026.

Recent GST rate cuts, implemented from September 22, may offer some support to demand in the coming months. However, some economists warn that high household debt levels could limit the positive impact of tax reductions on disposable income.

Despite foreign investors pulling out billions from Indian equities this year and global trade challenges, India remains one of the fastest-growing major economies in the world, according to that Reuters survey. Final GDP data for the quarter will be released on November 28 at 10:30 GMT.