The core infrastructure sector grew 3.8%, spurred on by cement and electricity production

Metro India News | Hyderabad 

The economic landscape of India in March-April 2025 showcased mixed trends amid a backdrop of global uncertainties. The Reserve Bank of India (RBI) revised the GDP growth forecast for 2025-26 to 6.5%, reflecting caution as other global agencies such as the World Bank and the IMF echoed similar downward adjustments. 

The RBI’s monetary policy cut the repo rate to 6%, while retail inflation figures dropping to 3.34%, the lowest in six years. The Manufacturing Purchasing Managers’ Index (PMI) demonstrated strong domestic demand despite slow exports, while the Services PMI indicated slight moderation amid competitive pressures. 

Industrial output for March registered a 3% increase, led by manufacturing and power sectors. The core infrastructure sector grew 3.8%, spurred on by cement and electricity production, contrasting with declines in energy outputs. A widening trade deficit emerged, reaching $21.54 billion due to rising oil and gold imports. Cautious optimism surrounded the overall outlook, balancing between domestic demand dynamics and external geopolitical risks that could influence future growth trajectories. 

Key Insights

The downward revision of GDP forecasts by the RBI, World Bank, and IMF signifies the susceptibility of the Indian economy to global economic conditions. The adjustments reflect concerns regarding geopolitical tensions and trade dynamics. The RBI’s decision to adopt a more accommodative monetary policy underscores a strategic effort to mitigate the effects of subdued growth and inflationary pressures. The interest rate cut aims to stimulate investment, increase consumer spending, and alleviate the burden on borrowers, setting the stage for a modest recovery. 

Similarly, the notable decrease in retail inflation may lead to improved purchasing power among consumers, potentially stimulating domestic demand. Strengthening of the Indian rupee against the dollar, coupled with a stable reserves position, enhances India’s capacity to manage external financial obligations and strengthens economic resilience. Despite various pressures and challenges, there remains a potential for robust recovery, provided that the country navigates its resource management, investment strategies, and consumer confidence effectively.

By Brickwork Ratings