Chief Economic Advisor on Indian Economy: Chief Economic Advisor (CEA) V. Ananth Nageswaran said on Friday that the country’s economic growth rate is expected to be more than 6.8% in the current financial year. He said that the main reason for this has been the increase in consumption due to reduction in GST rates and relief in income tax.

In the economic review presented in Parliament in January, the real GDP growth rate for the financial year 2025-26 was estimated to be between 6.3 to 6.8%. Addressing a private news channel’s program ‘Global Leadership Summit 2025’, Nageswaran said that he easily sees a growth rate above 6.8%.

The country’s economy will boom

He further said that in August there were concerns that the growth rate may remain at the lower end of the 6 to 7% range, but now it is clear that it will go above 6.5% and possibly even above 6.8%. However, before estimating 7%, we will have to wait for the second quarter data.

It is noteworthy that India’s GSP growth rate in the first quarter of the current financial year was 7.8%. This growth was mainly possible due to the better performance of the agriculture sector and the strength of sectors like trade, hotels, financial services and real estate. Earlier, the highest GDP growth of 8.4% was recorded in the January-March 2024 quarter. At the same time, China’s growth rate was 5.2% in the April-June quarter. Thus, India still remains the fastest growing large economy in the world.

India-US deal expected soon

Nageswaran said that if India-US bilateral trade agreement (BTA) is reached, it will provide additional impetus to economic growth. He said that if a solution is found on the trade front, the growth forecast may go higher. Also expressed hope that the agreement would be completed soon, although no deadline was given for this.

At present, America has imposed a high tariff of 50% on goods imported from India from August 27, with an additional penalty of 25% for purchasing crude oil from Russia. While imposing this customs duty on August 7, US President Donald Trump had said that India has harmed American interests by continuing to import oil from Russia and maintaining trade barriers.

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India’s Index of Industrial Production: This news is going to give relief for the Indian economy facing the American tariff. In July, there has been a 3.5 percent increase in industrial production of the country. This is the highest increase in the last four months. The main reason for this surge was the better performance of the manufacturing sector.

On Thursday, the official data released by the National Statistics Office (NSO) stated that the Industrial Production Index (IIP) increased by 3.5 percent in July. This is the highest level after the 3.9 percent increase recorded in March this year. However, in July 2024, industrial production had increased at the rate of 5 percent, that is, this time the growth on an annual basis has been slightly slow.

Meanwhile, NSO has kept the growth rate of industrial production for June 2025 stable at 1.5 percent. This figure is the same as the temporary estimate released last month.

Why increased speed?

In July 2025, the growth rate of manufacturing sector was 5.4 percent, compared to 4.7 percent in the same month last year. However, the mining sector recorded a huge decline of 7.2 percent. A year ago, it increased by 3.8 percent in the same period. There was also a big decline in power generation. While power generation increased by 7.9 percent in July 2024, it was only 0.6 percent in July 2025.

FY

The country’s total industrial production increased by only 2.3 percent in the first four months (April-July) of FY 2025-26. Whereas in the same period last year, it was 5.4 percent. It is clear that at the beginning of the current financial year, the pace of industrial activities has been relatively slow.

Significantly, this increased news has come at a time when 50 percent US tariffs have been effective on India since August 27, one day ago. However, many efforts are being made by the government to deal with it. But, it is being said that due to this high tariff, business related to labor -oriented employment such as clothes, leather, footwear, gems and jewelery can be affected.

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