India retains fastest-growing major economy tag despite GDP forecast trim to 6.2%: Govt Economic Review

India's economy is expected to expand by 6.2% in the fiscal year 2025-26, reflecting a slight decrease of 30 basis points from the earlier projection provided in January 2025, according to the Monthly Economic Review released by the Finance Ministry.

Nevertheless, despite this adjustment, India continues to maintain its position as the fasted growing major economy internationally, showcasing the least reduction when compared to other prominent economies amidst increasing global uncertainties and rising trade tensions.

Despite mounting global uncertainties, India’s economy displayed remarkable resilience in April 2025, the Monthly Economic Review stated. Key economic indicators such as GST collections, manufacturing and services PMI, and e-way bill generation all hit historic or near-record highs, indicating sustained momentum in industrial and commercial activity.

Retail inflation dropped to 3.16% in April, the lowest since July 2019, driven by a sharp fall in food inflation, which eased to 1.8%, the lowest since November 2021. This decline was supported by a robust rabi harvest, increased acreage of summer crops, and adequate foodgrain procurement. The Indian Meteorological Department's forecast of an above-normal monsoon further reinforces the outlook for stable prices.

On the trade front, India’s total exports grew 12.7% year-on-year, defying global slowdown fears, while the rupee emerged as one of the best-performing major currencies. Sovereign credit rating agency Morningstar DBRS upgraded India’s rating to BBB (Stable), citing macroeconomic stability, ongoing infrastructure investment, and a resilient financial sector.

Private investments also showed signs of recovery. A Ministry of Statistics survey showed a 66.3% rise in aggregate capex between FY22 and FY25, and new private investment announcements hit Rs 14.4 lakh crore in Q4 FY25 — the highest ever recorded.

Meanwhile, India’s stock market outperformed global indices in April, with the Nifty 50 gaining 5.04%, backed by robust domestic fundamentals and reduced risk premiums on government bonds.

Labour market trends were equally optimistic. White-collar hiring rebounded strongly in April, with the Naukri JobSpeak Index up 9% YoY, and EPFO data showed 14.6 lakh net payroll additions in March, mostly young first-time jobseekers.

While risks remain—especially due to global trade tensions and the threat of renewed U.S. tariffs on Indian exports—the report stresses that India’s economic fundamentals, policy stability, and domestic consumption continue to position it as a standout performer among major economies.