The year 2025 has been very important for the Indian economy and it will be remembered as a strong economic period in the years to come. According to the government’s annual review, fast economic growth, controlled inflation, strength in exports and improvement in the labor market were the main pillars of this year. According to the press note issued by the Press Information Bureau (PIB), the country’s gross domestic product (GDP) growth rate reached 8.2 percent in the second quarter of the financial year 2025-26, which is the highest level in the last six years.

signs of strong economy

Despite global trade challenges, strong domestic demand gave impetus to the economy, due to which growth was recorded at 7.8 percent in the first quarter of the financial year 2024-25 and 7.4 percent in the fourth quarter. Inflation remained at a low level throughout the year. The consumer price index was 4.26 percent in January 2025, which came down to about 3.55 percent by November, while the wholesale price index also remained under control, which led to stability in prices and gave the RBI the opportunity to soften the policy rates.

Better situation in the labor market

Improvement was also seen on the employment front, where the unemployment rate came down to 4.7 percent in November 2025, which was 5.2 percent in October and was considered to be the biggest decline after April 2025. The export sector also remained strong and merchandise exports increased to $38.13 billion in November, while the services sector recorded a sharp increase in global demand for Indian software and business services.

Government said- Gold Locks Movement

The government has described this balanced situation as a “Goldilocks movement” for the Indian economy, where strong demand and controlled inflation are in balance. In the same sequence, Gross Value Added (GVA), which measures domestic production, also increased to 8.1 percent in the second quarter of the financial year 2025-26, in which the industrial and service sectors had an important contribution.

Overall, India’s GDP has reached $4.18 trillion and the country has become the fourth largest economy in the world, which indicates that the Indian economy will continue to grow strongly in the future.

Also read: Rupee came to life due to weakness of dollar and strong industrial production, know how American currency was defeated

India’s manufacturing PMI: Despite global uncertainties, there has been a significant increase in India’s manufacturing sector in July. The PMI index remained over 58 for the second consecutive month. The figure was 58.4 in June, which increased to 59.1 in July- this is the highest level of the last 16 months.
Manufacturing sector boom

Seasonally adjusted HSBC India Manufacturing Purchase Manager Index (PMI) increased from 58.4 of June to 59.1 in July. This is a sign of the strongest improvement in the region since March 2024. The PMI extending above 50 of the index indicates expansion in production activities, while the figure below 50 indicates contractions.

Key points in HSBC report

HSBC Chief Indian Economist Pranjul Bhandari said that the manufacturing sector growth in July was at 59.1, which is more than 58.4 in June. This increase became possible due to new orders and strong increase in production.

Sale and production at record level

According to the survey, the total sales increased at the fastest speed in about 5 years. As a result, manufacturing growth reached a 15 -month high. The survey also stated that Indian manufacturers are convinced about the increase in production in the next 12 months. However, the overall positive spirit has come to its low level in the last three years.

Pressure on cost and prices

According to the survey, the cost of raw materials increased rapidly in July. The prices of items such as aluminum, leather, rubber and steel increased, causing the cost pressure to increase. Due to the high demand situation, companies have also increased the prices of their products. The SBC India Manufacturing PMI is prepared by S&P Global based on the answers to the questions sent between about 400 manufacturing companies.

Also read: From UPI and LPG to SBI Card … These rules have changed from today, know what will be the effect on you