India’s Q1 GDP is estimated to have grown 6.7%, Bloomberg data showed, moderating from 7.4% in January–March but still higher than the 6.5% recorded a year earlier. Economists attribute the quarter’s resilience to front-loaded US shipments and stronger rural consumption, aided by an early monsoon.
But headwinds loom. Nomura’s Sonal Varma said that while exports got a temporary lift, private capex and urban demand remain sluggish. The newly imposed US tariffs on Indian goods such as textiles and jewellery could hit growth in the coming quarters.
Bank of America economists flagged slowing auto sales and weaker manufacturing as additional risks. Citigroup estimates the tariffs alone could trim annual GDP by nearly 0.8 percentage points.
On the policy front, the Modi government’s GST rationalisation and the RBI’s 100-basis-point rate cuts since February are expected to cushion domestic demand, which accounts for the bulk of India’s economy.