India's 6.5% GDP growth in FY25 'creditable' amid global headwinds: CEA

Chief Economic Adviser V Anantha Nageswaran cites policy continuity, PLI success, and external resilience as key factors in India's strong 2024-25 economic performance

Chief Economic Adviser V Anantha Nageswaran on Wednesday said India has managed to maintain a healthy growth rate despite global economic and political volatility, calling it a “creditable achievement”.

 

Speaking to news agency ANI in Thiruvananthapuram, Nageswaran said, “The global context has become uncertain and complex. Economic and political conditions have turned unfavourable for growth. Given these situations, the Indian economy has maintained a good growth rate in 2024-25 at 6.5 per cent.”

 

For 2025-26, the government projects GDP growth in the range of 6.3–6.8 per cent.

 

Growth gap with developed nations widens

Nageswaran noted that the gap between India’s growth rate and that of developed economies is now significantly wider than it was during the 2003-08 high-growth phase, when India expanded at 8-9 per cent.

 

“To achieve 6.5 per cent on a steady basis in this environment is a creditable achievement. India is poised to maintain that track record,” he said.

 

He attributed the performance to continuity in policy. “The current government came out with important policy measures in the last two Budgets. If we are able to move faster and convey a sense of dynamism, then chances are high that we can even improve on our growth rate in the coming years,” Nageswaran said.

 

PLI scheme driving self-reliance and exports

Highlighting the production-linked incentive (PLI) scheme, Nageswaran described it as a key driver of self-reliance and manufacturing competitiveness.

 

“The PLI scheme has done well. It has improved our sense of aatmnirbharta (self-reliance) in many sectors. From nothing to today, we are exporting between $10 billion and $15 billion worth of mobile phones,” he said.

 

He added that domestic capacity had been built in several renewable energy-related product areas. “This scheme focused minds on what we need to have a forceful manufacturing process in the world.”

 

Geopolitical risks remain a concern

Nageswaran cautioned about the potential economic impact of geopolitical tensions, particularly in West Asia.

 

“The current conflict between Israel and Iran may not be too good for us. In the last week, crude oil prices have risen to about $73–74 per barrel. This raises essential risks for India,” he said.

 

However, he pointed to the Indian economy’s past resilience. “In 2022, when the Russia–Ukraine war started, crude oil prices went above $100 per barrel. Yet the Indian economy was able to sustain a 7 per cent growth rate.”

 

Tariffs not a major threat to exports, says CEA

On the outlook for trade, Nageswaran said changes in tariffs should not automatically be seen as detrimental to Indian exports.

 

“Ultimately, it also matters what tariff rates India’s competing countries get. It is premature to say that tariffs will make our exports difficult for now,” he said.

 

RBI maintains 6.5 per cent GDP growth forecast for FY26

The Reserve Bank of India also maintained its GDP growth forecast for FY26 at 6.5 per cent at its last monetary policy meet. The central bank cited continued strength in investment activity, healthier balance sheets across sectors, robust government capital spending, and a favourable outlook for agriculture as key drivers of growth.