India’s Economic Growth to Maintain Momentum in Q1 FY 2024-25: Finance Ministry

The Finance Ministry’s monthly economic review for April 2024 indicates that India’s economic growth is poised to maintain its robust momentum in the April-June quarter of fiscal year 2024-25.

A likely boost in merchandise exports, fuelled by enhanced supply chain resilience, is expected to contribute to this sustained economic performance.

The review highlights that the Indian economy concluded the previous fiscal year 2023-24 on a strong note, surpassing market expectations despite significant external headwinds.

Early indicators, such as Goods and Services Tax (GST) collections, e-way bills, electronic toll collections, vehicle sales, purchasing managers’ indices, and the value and number of digital transactions, point toward a continuation of this economic strength during the first quarter of the current fiscal year.

Both the industrial and service sectors are demonstrating a robust performance, bolstered by brisk domestic demand and tentative external demand.

This favourable climate presents an opportunity for India’s manufacturing firms to benefit from the “China Plus One” strategy, as organisations seek to diversify and strengthen their supply chains.

The EXIM Bank of India has forecasted double-digit growth in merchandise exports for the first quarter of fiscal year 2024-25, signalling a potential tailwind for the Indian economy’s growth trajectory.

However, the review acknowledges the substantial challenges posed by unrelenting geopolitical tensions and volatility in global commodity prices, particularly for petroleum products.

Nonetheless, the Finance Ministry expresses confidence that India’s nurtured and strengthened macroeconomic buffers will help the economy navigate these challenges reasonably smoothly.

As India continues to navigate the global economic landscape, the government remains focused on capitalising on the nation’s economic resilience and leveraging opportunities for export growth and supply chain diversification.