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Economic Times
3 days ago
- Business
- Economic Times
At 7.4%, India's growth steps on race pedal in Q4
India's economy surpassed expectations with a 7.4% growth in the March quarter, boosting FY25 growth to 6.5%. Investment recovery and strong construction drove this expansion, despite concerns about tepid urban demand and global uncertainties. While marking a four-year low, India remains the fastest-growing economy, poised to become the fourth largest, with economists projecting continued growth around 6.5%. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Urban Demand an Issue India's economy expanded faster than expected at a four-quarter high of 7.4% in the March quarter from a year earlier, lifting overall growth in FY25 to 6.5%, data released on Friday showed. The high growth belied concerns about a softer print amid risks from higher US tariffs, as a recovery in investment and a stronger construction sector propped up the ET poll conducted earlier this month had pegged growth at a median 6.8% for the quarter and 6.3% for risks to growth include tepid urban consumer demand , muted private investment demand and a volatile global environment. India has held its own in a 'growth-scarce' post-Covid global environment amid rising uncertainties due to political conflicts and trade tensions, said chief economic advisor V Anantha Nageswaran To be sure, the full-year gross domestic product (GDP) growth of 6.5% marks a four-year low. India's GDP had grown 9.2% in FY24. Despite the slowdown, India was the fastest-growing economy in the year and is on course to become the fourth largest later this year, overtaking nominal GDP growth rate was 9.8% in FY25 against a 12% rise in FY24, indicating a broadbased decline in inflation. The gross value added (GVA) grew 6.8% in the fourth quarter and 6.4% in economy had grown 6.4% in the December quarter and 8.4% in the year-earlier period. Gross fixed capital formation, an indicator of investment, rose 7.1% in FY25 and 9.4% in the March quarter. 'Real GDP was expected to fare strongly, partly due to a boost from net indirect taxes,' said Radhika Rao, senior economist at DBS Bank.'A catch-up in government spending, accompanied by betterperforming construction output, has lifted the headline figure,' Rao grew 5.4% in the fourth quarter, compared with 6.6% in Q3 and 0.9% a year ago. Manufacturing sector growth was 4.8% in the three months ended March, lower than 11.3% in Q4 of the previous year. Construction output surged 10.8% driven by high government capex. The 60 basis point gap between GDP and GVA in the fourth quarter was due to higher net indirect taxes, which rose 12.7%.However, private consumption growth eased to a five-quarter low of 6% while government final consumption expenditure contracted 1.8% in the fourth quarter after a gap of two quarters. 'The unevenness witnessed in the consumption recovery remains a critical monitorable going forward,' said Rajani Sinha, chief economist, CareEdge Ratings. 'The softness in urban demand continues to be an area of concern.'Economists said private sector participation in investment hanot yet taken off on a durable basis across sectors and, going ahead, India's FY26 GDP growth is estimated at 6-6.6%.US President's Donald Trump tariff threats also loom large. 'The reciprocal tariff is casting its shadow over global GDP and trade growth, which may force investors to postpone their investment decisions,' said Paras Jasrai, associate director, India Ratings and Research, adding that the investment outlook is still expects growth to stabilise around the 6.5% level at the start of FY26, supported by farm output, lower inflation and monetary easing, as well as continued public external uncertainties could have an impact through trade and investment channels. 'We believe that the Indian economy is poised to remain the fastest-growing major economy in FY26 (GDP growth expected at 6.3-6.5%) by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth,' said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India
Time of India
3 days ago
- Business
- Time of India
At 7.4%, India's growth steps on race pedal in Q4
India's economy surpassed expectations with a 7.4% growth in the March quarter, boosting FY25 growth to 6.5%. Investment recovery and strong construction drove this expansion, despite concerns about tepid urban demand and global uncertainties. While marking a four-year low, India remains the fastest-growing economy, poised to become the fourth largest, with economists projecting continued growth around 6.5%. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Urban Demand an Issue India's economy expanded faster than expected at a four-quarter high of 7.4% in the March quarter from a year earlier, lifting overall growth in FY25 to 6.5%, data released on Friday showed. The high growth belied concerns about a softer print amid risks from higher US tariffs, as a recovery in investment and a stronger construction sector propped up the ET poll conducted earlier this month had pegged growth at a median 6.8% for the quarter and 6.3% for risks to growth include tepid urban consumer demand , muted private investment demand and a volatile global environment. India has held its own in a 'growth-scarce' post-Covid global environment amid rising uncertainties due to political conflicts and trade tensions, said chief economic advisor V Anantha Nageswaran To be sure, the full-year gross domestic product (GDP) growth of 6.5% marks a four-year low. India's GDP had grown 9.2% in FY24. Despite the slowdown, India was the fastest-growing economy in the year and is on course to become the fourth largest later this year, overtaking nominal GDP growth rate was 9.8% in FY25 against a 12% rise in FY24, indicating a broadbased decline in inflation. The gross value added (GVA) grew 6.8% in the fourth quarter and 6.4% in economy had grown 6.4% in the December quarter and 8.4% in the year-earlier period. Gross fixed capital formation, an indicator of investment, rose 7.1% in FY25 and 9.4% in the March quarter. 'Real GDP was expected to fare strongly, partly due to a boost from net indirect taxes,' said Radhika Rao, senior economist at DBS Bank.'A catch-up in government spending, accompanied by betterperforming construction output, has lifted the headline figure,' Rao grew 5.4% in the fourth quarter, compared with 6.6% in Q3 and 0.9% a year ago. Manufacturing sector growth was 4.8% in the three months ended March, lower than 11.3% in Q4 of the previous year. Construction output surged 10.8% driven by high government capex. The 60 basis point gap between GDP and GVA in the fourth quarter was due to higher net indirect taxes, which rose 12.7%.However, private consumption growth eased to a five-quarter low of 6% while government final consumption expenditure contracted 1.8% in the fourth quarter after a gap of two quarters. 'The unevenness witnessed in the consumption recovery remains a critical monitorable going forward,' said Rajani Sinha, chief economist, CareEdge Ratings. 'The softness in urban demand continues to be an area of concern.'Economists said private sector participation in investment hanot yet taken off on a durable basis across sectors and, going ahead, India's FY26 GDP growth is estimated at 6-6.6%.US President's Donald Trump tariff threats also loom large. 'The reciprocal tariff is casting its shadow over global GDP and trade growth, which may force investors to postpone their investment decisions,' said Paras Jasrai, associate director, India Ratings and Research, adding that the investment outlook is still expects growth to stabilise around the 6.5% level at the start of FY26, supported by farm output, lower inflation and monetary easing, as well as continued public external uncertainties could have an impact through trade and investment channels. 'We believe that the Indian economy is poised to remain the fastest-growing major economy in FY26 (GDP growth expected at 6.3-6.5%) by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth,' said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India
Time of India
5 days ago
- Business
- Time of India
IIP growth slows to 8-month low in April over decline in mining output
NEW DELHI: India's industrial production growth fell to an eight-month low of 2.7% in April, dragged down by a contraction in mining output, high base effect and moderation in electricity production, official data released on Wednesday showed. The Index of Industrial Production ( IIP ) had expanded 3.9% in the previous month and 5.2% in April 2024. Manufacturing grew 3.4% in the first month of 2025-26 on the back of a solid expansion in the automobile sector. While mining output contracted 0.2%, electricity generation increased a muted 1.1% year-on-year in April. Within the manufacturing sector , 16 out of the 23 industry groups recorded positive growth. "The slowdown, albeit mild, was broad-based driven by a weaker performance across all the three production sectors," said Aditi Nayar, chief economist, ICRA . Only 11 of the total 23 manufacturing sub-sectors had a higher on-year growth than overall output growth in April, illustrating the skewness in industrial growth, according to Paras Jasrai, economist at India Ratings and Research . Live Events The silver lining in the data was the consumer durables and capital goods sector. The 6.4% expansion in consumer durables was driven by a 10.5% growth in electronic goods ahead of the upcoming marriage season. The auto sector reported a solid 15.4% growth. However, consumer non-durables output declined 1.7%, highlighting the urban-rural divide. "Going ahead, the domestic consumption landscape remains a key monitorable due to the prevailing unevenness in demand recovery... the continued improvement in the inflation scenario led by easing of food inflation is a key tailwind for the demand recovery," said Rajani Sinha, chief economist, CareEdge Ratings. A 20.3% increase in capital goods was supported by both electrical and non-electrical machinery. "It needs to be seen if this is maintained in the coming months as one is looking at investment to pick up," said Madan Sabnavis, chief economist, Bank of Baroda . Infrastructure and construction goods output increased 4% in April while primary goods saw a marginal contraction of 0.4 %. "On the whole the performance is encouraging and it will be important that there is further pickup in coming months," Sabnavis said. Economists expect the unseasonal rains to impact construction goods output and keep factory output growth under 2% on-year in May.
India Gazette
6 days ago
- Business
- India Gazette
Tightened Additional Performance Security norms, alone won't curb aggressive bidding for road projects: CareEdge
New Delhi [India], May 28 (ANI): The government's decision to raise Additional Performance Security (APS) requirements for aggressively bid road projects is a constructive step, but it alone may not sufficiently address the irregularities in the responsible bidding, said CareEdge in a report. The rating agency firm noted that the removal of the APS cap plugs a key loophole in concession agreements. CareEdge cautioned that tighter APS norms alone may not be sufficient to address intense competition in the sector. 'The increase in Additional Performance Security (APS) for aggressively bid projects is a constructive step towards promoting more responsible bidding. Removing the cap on the APS requirement addresses the existing loophole in concession terms. Nevertheless, CareEdge Ratings expects that stringent norms for APS on their own may not be sufficient to curb the intense competition in the road sector meaningfully,' said Maulesh Desai, Director, CareEdge Ratings. The report further adds that ample non-fund-based bank lines, backed by financially strong sponsors, and lower project awards are diluting APS's impact. The release of performance securities based on project progress instead of construction quality is also weakening deterrence, it added. 'Availability of substantial non-fund-based bank lines with moderate to strong sponsors amid lower project awarding activity, besides the release of performance security linked to project progress instead of quality of construction, are prominent factors negating the favourable impact of APS in curbing bidding aggression in NH-HAM projects,' Desai added. Earlier, the Ministry of Road Transport & Highways (MoRTH) tightened the bidding norms for central road projects by tightening the additional performance security (APS) norms, aimed at easing competitive pressure. The report lauded the synchronisation of project approvals and appointed dates with land and statutory clearances as a strategic effort to reduce delays and cost overruns. However, the report by the rating agency warned that the success of these reforms depends on timely coordination among stakeholders and strict on-ground implementation. 'The success of these measures will depend heavily on the timely and coordinated efforts of various stakeholders and effective enforcement of contractual terms on the ground,' said Setu Gajjar, Assistant Director, CareEdge Ratings. (ANI)
Time of India
20-05-2025
- Business
- Time of India
India's orthopaedic and cardiac implant sector to touch $4.5-5 bn by FY28: Report
New Delhi: India's orthopaedic and cardiac implant sector is expected to reach USD 4.5-5 billion by 2027-28, mainly driven by strong domestic demand and gradually growing exports, a report said on Monday. Currently, the orthopaedic and cardiac implant sector, including exports, stood at USD 2.4-2.7 billion in FY24, according to a report by CareEdge Ratings . The growth in the sector is led by increasing per capita income, greater healthcare awareness, ageing population, expanding healthcare infrastructure, and broadening insurance coverage, it stated. The report said that domestic manufacturers have grown at a faster pace than the dominant foreign MNCs in recent years, aided by their price competitiveness and a gradual build-up of an efficacy and safety track record. The segment is dominated by the presence of foreign multinational companies, which largely import the implants and sell them in India as the implant business requires strong technological capabilities, a proven track record of safety and efficacy, a broad marketing and distribution network, and a robust post-sales support system. However, India is gradually reducing its dependence on imports as sales of homegrown implant manufacturers have grown at a compound annual growth rate (CAGR) of 28 per cent (including a CAGR of 37 per cent for exports) during the four years ended FY24, outpacing the sales CAGR of 12 per cent for foreign multinational corporations (MNCs) during the same period. The sales volume growth of domestic entities was even higher, driven by their competitive pricing and increased participation in government-sponsored insurance schemes. Over the past few years, Indian manufacturers have not only challenged foreign MNCs in the domestic market but are also gradually venturing into the export market, added the report. The bright prospects for domestic implant manufacturing have also attracted interest from large pharmaceutical companies, with Zydus Lifesciences Limited and Alkem Laboratories Limited having already announced investments in the manufacturing and distribution of implants, it added. "India's medical implant sector is on a robust growth trajectory, driven by strong domestic demand and growing exports. India's implant sector, including exports, is expected to reach USD 4.5 to USD 5 billion by FY28, registering an impressive CAGR of around 15-16 per cent. Additionally, with supportive government policies and a growing healthcare infrastructure, the implant market is advancing towards 'Atmanirbharta'," CareEdge Ratings Director Krunal Modi said. However, there is a need to watch out on the ongoing trade and tariff uncertainty, imposition of price caps, regulatory scrutiny, and patent litigations for the medical implant sector, the report added.
