India Growth Stayed Strong Post Diwali on Urban Demand
By Reuters | 22 Dec, 2025

Urban consumption helped India stay on track to achieve a better-than-expected 7.3% GDP growth for 2025.

The Indian economy continued to hold up its strong growth momentum in November, helped by private and urban consumption demand, the Reserve Bank of India said in its monthly bulletin on Monday.

"Demand conditions remained robust, with indicators of urban demand strengthening further," the RBI report said. "High-frequency indicators suggest that overall economic activity held up in the post-festival month of November."

India's economy expanded by 8.2% in the July-September quarter, its fastest pace in six quarters, showing "remarkable resillience" amidst persistent global trade uncertainties, the central bank said.

"Coordinated fiscal, monetary and regulatory policies have helped to build resilience over the year," the RBI said.

Earlier this year, India cut taxes on hundreds of consumer items ranging from soaps to small cars to spur domestic demand in the face of economic headwinds from punishing U.S. tariffs.

Additionally, the central bank cut its key interest rate by a total of 125 basis points in 2025, including a 25 bps reduction in December.

"The decisions were guided by the benign inflation outlook for both headline and core, which provided space for monetary policy to further support the growth momentum," the RBI said in its bulletin.

The central bank raised its GDP forecast for the current fiscal year to 7.3% from 6.8% earlier this month, while lowering its inflation projection to 2% from 2.6%.

However, it lowered the GDP forecast for first half of next year to 6.7%-6.8%.

India's inflation edged higher to 0.71% in November from a record low of 0.25% in October, but remained well below the central bank’s target of 4% with a 2 percentage point band on either side.

"Inflation in both urban and rural areas edged up in November with the latter moving out of deflation," RBI said.

(Reporting by Ashwin Manikandan; Editing by Varun H K)