India’s GDP to Grow 7.8% in October-December 2025

Data released by the Indian government on February 27 showed that real GDP grew by 7.8% year-on-year in the October-December period of 2025. This growth rate slowed compared to the 8.4% growth in the July-September period. The decline in the October-December growth rate was attributed to the Indian government’s earlier-than-expected public investment to stimulate the economy, which had been implemented ahead of schedule. Consumption remained strong due to the effects of large-scale tax cuts.

The Indian government has revised its GDP calculation method. Taking into account changes in the economic structure, the base year has been changed from 2011 to 2022. Past growth rates, including those for July-September 2025, have also been revised.

Gross fixed capital formation, showing public and private investment, grew by 7.8%, a slowdown compared to the 8.4% growth in the previous quarter. Statistics from the Indian rating agency ICRA show that the Indian government’s capital expenditure in the October-December period of 2025 decreased by 23% year-on-year. Previously, consumption surged by 40% from April to September due to aggressive infrastructure construction, but has since declined.

Personal consumption, which accounts for nearly 60% of India’s GDP, grew by 8.7%, exceeding the 8% growth in the previous quarter. The Indian government’s reduction of the Goods and Services Tax (GST), equivalent to consumption tax, starting in September 2025, has boosted consumption.