India set to end 2025 on strong economic footing with high growth, low inflation: Govt
India is poised for a significant economic year in 2025, with real GDP expanding at an 8.2% rate in Q2 FY25-26, a six-quarter high. Inflation remained low, with CPI softening to 0.71% in November, while unemployment dropped to 4.7%. Strong export performance and robust foreign exchange reserves further bolster the economy, now the world's fourth-largest.
New Delhi: India is on track to conclude 2025 as one of its most significant years of economic performance, with key macroeconomic indicators reflecting strong growth, low inflation, expanded exports and improved labour market conditions, the government said in its year-end economic review.
According to a press note released by the Press Information Bureau, India's real Gross Domestic Product (GDP) expanded at 8.2 per cent in the second quarter of the financial year (FY) 2025-26, marking a six-quarter high and underscoring resilient domestic demand amidst a challenging global trade environment. This follows growth rates of 7.8 per cent in the first quarter and 7.4 per cent in the fourth quarter of FY 2024-25.
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The government highlighted that the real Gross Value Added (GVA), a measure of domestic production, grew by 8.1 per cent in Q2 of 2025-26, driven by buoyancy in both the industrial and services sectors. The sustained expansion signals a broad-based upturn in economic activity across key sectors.
ANI
Inflation trends remained largely benign throughout the year, with the Consumer Price Index (CPI) inflation rate steadily softening from 4.26 per cent in January 2025 to 0.71 per cent in November 2025, offering the Reserve Bank of India (RBI) policy space to maintain a supportive monetary stance. Wholesale Price Index (WPI) inflation also moderated during the year, reinforcing the overall price stability environment.
On employment, the latest labour force estimates revealed a notable improvement in job market conditions. In November 2025, the unemployment rate fell to 4.7 per cent, down from 5.2 per cent in October, the lowest level recorded since April 2025. The decline was broad-based, with both urban and rural segments contributing to the improvement. The overall labour force participation and worker participation rates also showed encouraging trends.
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Export performance strengthened over the course of 2025, with merchandise exports reaching USD 38.13 billion in November, up from USD 36.43 billion in January. Services exports, a key pillar of the external sector, also recorded solid growth, reflecting India's expanding footprint in global value chains and rising demand for Indian software, business services and other globally tradable services.