India Economic Growth and Stability

“In this global milieu, the Indian economy remains a key driver of global growth. Growth momentum is buoyed by strong domestic growth drivers, sound macroeconomic fundamentals and prudent policies.” ~ Sanjay Malhotra, RBI Governor

 

1. India recorded real Gross Domestic Product (GDP) growth of 6.5 percent in 2024–25, maintaining its position as the fastest growing major economy despite global uncertainty, trade tensions, and weakening cross-border investment conditions.

2. The Reserve Bank expects India to sustain 6.5 percent real GDP growth in 2025–26, while other estimates project similar momentum, reflecting confidence in domestic demand and macroeconomic stability.

3. India’s nominal GDP at current prices rose from ₹106.57 lakh crore in 2014–15 to an expected ₹331.03 lakh crore in 2024–25, nearly tripling within a single decade.

4. Inflation based on the Consumer Price Index (CPI) declined to 2.82 percent in May 2025, marking the lowest annual retail inflation level recorded since February 2019.

5. Consumer Food Price Index (CFPI) inflation fell to 0.99 percent in May 2025, with rural food inflation at 0.95 percent and urban food inflation at 0.96 percent.

6. The Reserve Bank’s June 2025 assessment indicated inflation would remain aligned with the 4 percent medium-term target, supported by strong crop output and subdued imported inflation pressures.

7. Retail investor participation in capital markets rose from 4.9 crore in 2019 to 13.2 crore by the end of 2024, showing broadening confidence in equity investment.

8. Between April and December 2024, India recorded 259 Initial Public Offerings (IPOs), a 32.1 percent increase over the previous year, while funds raised surged to ₹1,53,987 crore overall.

9. India’s share in global IPO listings climbed from 17 percent in 2023 to 30 percent in 2024, giving the country the highest global share recorded.

10. Foreign Direct Investment (FDI) inflows reached United States Dollar (USD) 81.04 billion in Financial Year (FY) 2024–25, registering a 14 percent rise over FY 2023–24 and more than doubling from 2013–14.

11. The services sector attracted 19 percent of total FDI in FY 2024–25, while computer software and hardware received 16 percent and trading accounted for 8 percent.

12. India’s foreign exchange reserves stood at USD 697.9 billion on 20 June 2025, sufficient to cover more than eleven months of goods imports comfortably.

13. India’s current account posted a surplus of USD 13.5 billion in Quarter 4 (Q4) of 2024–25, while the full-year current account deficit remained contained at 0.6 percent.

14. Total exports touched a record USD 824.9 billion in 2024–25, with services exports rising to USD 387.5 billion and non-petroleum merchandise exports reaching USD 374.1 billion.

15. Manufacturing Gross Value Added (GVA) at constant prices increased from ₹15.6 lakh crore in 2013–14 to ₹27.5 lakh crore in 2023–24, reflecting a significantly expanded industrial base.

Must Know Terms :

 

1.CFPI

Consumer Food Price Index (CFPI) measures changes in food prices paid by consumers and is used to track food inflation trends. In May 2025, CFPI inflation fell to 0.99 percent. Rural food inflation stood at 0.95 percent, while urban food inflation was 0.96 percent. This marked the lowest food inflation level recorded since October 2021 in India during that period.

2.Resilience

Resilience describes the ability of an economy to sustain growth, absorb shocks, and recover without major instability. India’s resilience in 2024–25 was reflected in 6.5 percent real GDP growth, easing inflation, strong exports, robust foreign exchange reserves, and steady foreign investment. It also showed in stable domestic demand, active capital markets, and manageable current account and debt conditions.

3.Surplus

Surplus in external accounts means receipts exceed payments during a given period. India recorded a current account surplus of USD 13.5 billion in the fourth quarter of 2024–25, equal to 1.3 percent of GDP. This was higher than the USD 4.6 billion surplus in the corresponding quarter of the previous year, indicating stronger export earnings and foreign inflows.

4.Inflows

Inflows refer to money entering an economy from external sources such as Foreign Direct Investment (FDI), remittances, and portfolio investments. In FY 2024–25, India received USD 81.04 billion in FDI inflows, up 14 percent from the previous year. Strong inflows supported external stability, improved investor confidence, and contributed to a stronger overall balance of payments position.

5.Merchandise

Merchandise refers to physical goods traded across borders, unlike services such as software or consulting. In 2024–25, India’s non-petroleum merchandise exports reached a record USD 374.1 billion, rising 6.0 percent from the previous year. Growth came from sectors such as machinery, chemicals, electronics, and defence equipment, showing strengthening manufacturing capacity and wider global market competitiveness.

6.Vigour

Vigour in economic context means strong activity, momentum, and sustained expansion across sectors. India’s vigour in 2024–25 was visible in 9.9 percent nominal GDP growth, 6.5 percent real GDP growth, rising private investment, strong infrastructure spending, expanding exports, and increasing retail market participation. It reflected an economy growing with confidence, stability, and broad-based sectoral support throughout the year.

Key Takeaways :

a. India’s GDP grew 6.5% in 2024–25, the highest among major economies.

b. Inflation fell to 2.82% in May 2025, the lowest level since February 2019.

c. Total exports reached a record USD 824.9 billion in 2024–25.

 

 

MCQ :

1. In 2024–25, India recorded real Gross Domestic Product growth of:

A) 5.8 percent
B) 6.5 percent
C) 7.2 percent
D) 4.9 percent

2. India’s nominal Gross Domestic Product at current prices was expected to reach which level in 2024–25?

A) ₹331.03 lakh crore
B) ₹281.03 lakh crore
C) ₹301.03 lakh crore
D) ₹351.03 lakh crore

3. Consumer Price Index inflation declined to what level in May 2025?

A) 3.82 percent
B) 2.82 percent
C) 1.82 percent
D) 4.82 percent

4. Consumer Food Price Index inflation in May 2025 stood at:

A) 1.99 percent
B) 0.79 percent
C) 0.99 percent
D) 1.29 percent

5. Retail investor participation in capital markets increased to how many crore by the end of 2024?

A) 10.2 crore
B) 11.2 crore
C) 12.2 crore
D) 13.2 crore

6. Between April and December 2024, India recorded how many Initial Public Offerings?

A) 259
B) 219
C) 239
D) 279

7. India’s share in global Initial Public Offerings listings rose to what level in 2024?

A) 24 percent
B) 27 percent
C) 30 percent
D) 33 percent

8. Foreign Direct Investment inflows in FY 2024–25 reached:

A) USD 71.04 billion
B) USD 81.04 billion
C) USD 91.04 billion
D) USD 61.04 billion

9. Which sector attracted 19 percent of total Foreign Direct Investment in FY 2024–25?

A) Manufacturing
B) Trading
C) Agriculture
D) Services

10. India’s foreign exchange reserves stood at what level on 20 June 2025?

A) USD 687.9 billion
B) USD 697.9 billion
C) USD 707.9 billion
D) USD 677.9 billion

11. India’s current account surplus in Quarter 4 of 2024–25 was:

A) USD 11.5 billion
B) USD 12.5 billion
C) USD 13.5 billion
D) USD 14.5 billion

12. Total exports in 2024–25 touched a record:

A) USD 804.9 billion
B) USD 814.9 billion
C) USD 824.9 billion
D) USD 834.9 billion

13. Non-petroleum merchandise exports in 2024–25 reached:

A) USD 354.1 billion
B) USD 364.1 billion
C) USD 374.1 billion
D) USD 384.1 billion

14. Manufacturing Gross Value Added at constant prices increased to what level in 2023–24?

A) ₹25.5 lakh crore
B) ₹26.5 lakh crore
C) ₹27.5 lakh crore
D) ₹28.5 lakh crore

15. Which term refers to money entering an economy from external sources such as Foreign Direct Investment, remittances, and portfolio investments?

A) Surplus
B) Vigour
C) Merchandise
D) Inflows