India's economy outperforms peers as it surges 7.4% in Q1

Gross domestic product in Asia's third-largest economy was above a forecast year-on-year growth of 6.7% in a Reuters poll

- 

India's economy surged 7.4% in January to March, much faster than forecasts and driven by construction and manufacturing, although uncertainty about US tariffs poses risks to the outlook.

Gross domestic product in Asia's third-largest economy was above a forecast year-on-year growth of 6.7% in a Reuters poll, and was up from a revised 6.4% expansion in the previous quarter, official data released on Friday showed.

It was the fastest increase in GDP since January-March 2024.

"India's growth is holding up in a growth-scarce environment," said V. Anantha Nageswaran, India's chief economic adviser, after the release of the data, adding India outshone other large and contemporary economies.

They include China, which grew 5.4% in January-March.

The Reserve Bank of India (RBI) expects GDP growth of 6.5% in the fiscal year beginning April I. At that rate, India will remain the fastest growing major economy and could match Japan for size this year at $4.18 trillion, according to projections by the IMF.

The gross value added (GVA), seen as a more accurate measure of underlying economic activity, grew 6.8% in the first three months of 2025, compared to a revised expansion of 6.5% in the previous quarter. GVA strips out indirect taxes and government subsidy payouts, which tend to be volatile.