India’s Growth Story: Retail Boom Vs Industrial Slowdown - Reality Check For Q3

Economist Aditi highlights a critical disconnect emerging in India’s growth data—while retail and festive consumption numbers for October appear extremely strong, production-side indicators tell a different story. Industrial output (IIP) and GST collections show weaker momentum, suggesting that the festive surge may not reflect sustained growth. With major holidays shutting production and a high base impact in H2, Aditi expects Q3 to deliver softer numbers compared to the robust performance seen earlier. Additional risks include slowing U.S. capital expenditure and fading export tailwinds. She warns that H2 FY25 may look materially weaker than H1, with full-year growth likely averaging around 7.4%, rather than continuing at recent elevated levels.