India GDP: Growth at 7.4% faster than expected in fourth quarter

But ongoing global uncertainties, including US President Donald Trumps trade war, are expected to weigh on export demand.

India is currently negotiating a trade-agreement with the United States which is officially expected to conclude by fall. Trump slapped tariffs of up to 27% on Indian goods in April – and a 90-day pause on these ends on 9 July.

Economists expect GDP growth in the ongoing financial year 2025-26 to further slow to 6% on the back of these global slowdown worries which could delay new private capital spending on projects.

The International Monetary Fund (IMF) expects global growth to drop to 2.8% in 2025 and 3% in 2026.

Data from Icra earlier showed private sector expenditure, as part of overall investments in Indias economy, fell to a 10-year low of 33% in the last financial year.

Net foreign direct investment (FDI) into India – at $0.35bn in 2024-25 – also fell to the lowest level in two decades, as rising outward foreign investment and repatriations by Indian companies, neutralised inward investment.

Prime Minister Narendra Modis government has been attempting to position India as a manufacturing hub for global companies.

While companies like Apple indicated recently that it was shifting most of its production of iPhones headed to the US from China to India, trade analysts have cautioned that such manufacturing investment could yet stall, with the US and China agreeing to roll-back tariffs earlier this month.