India, GDP grows 8.2% despite US tariffs
The figure captures the performance of the economy in the three months from July to September compared to the same period in 2024
From our correspondent
NEW DELHI - In the quarter from July to September, the Indian economy grew by 8.2 per cent compared to the same period a year earlier, marking the highest rate in 18 months, exceeding analysts' and Reserve Bank of India (RBI) forecasts, and showing that it has absorbed the initial shock of US tariffs.
The GDP data showed the good performance of manufacturing (+9.1 per cent) and services (+9.2 per cent) as well as the resilience of consumption - an item 'worth' about 57 per cent of India's GDP - which grew by 7.9 per cent compared to a year ago, when the increase was 7 per cent. "The GDP growth is very encouraging. It reflects the impact of pro-growth policies and reforms,' Prime Minister Narendra Modi wrote on Social X, referring to the July-September period (India's fiscal year starts in April). The analysts' consensus was for growth of between 7 and 7.5 per cent, while the RBI estimated 7 per cent.
Behind the jump in GDP is also the low base, since during the same period last year growth was only 5.6 per cent. Another factor, since the figure of 8.2 per cent refers to real GDP, is unusually low inflation, so that at 8.7 per cent, nominal growth deviated only slightly. The mismatch between the latter figure and the Ministry of Finance's forecast for the entire fiscal year (+10.1%) legitimises some doubts about the attainability of the target of a deficit at 4.4% of GDP due to lower tax revenues. The gap between real and nominal GDP has not been so narrow since 2020.
A third element to be taken into account concerns US tariffs, which rose from 25 per cent to 50 per cent on 27 August. According to Garima Kapoor of Elara Securities, some companies, faced with the risk of an impasse in negotiations, may have done some frontloading in an attempt to avoid the impact of the increases. It has to be said, however, that in September, despite the trade war declared by Washington, overall Indian exports grew to USD 67.20 billion against USD 66.68 billion last year. On the consumption front, however, the impact of the government's recent tax cuts has been limited, as the new rates came into effect on 22 September.
