India Key Themes 2025: Back to the old growth normal

Following India’s stunning economic performance in 2023 and the start of 2024, we believe the rate of growth has now normalised and activity will expand at a softer pace in 2025.

In this report, we explore three key questions shaping India’s economic outlook for 2025:

• Will India’s consumption rebound? After being a strong growth driver before the pandemic, consumption has now fallen behind wider economic growth. The strong growth in the wider economy has not still translated into broad labour market improvements. Can private consumption demand grow amidst structurally weak labour markets in 2025?
• Will private investment lead the charge in investment growth? Infrastructure improvements, a healthy banking sector and strong corporate balance sheets bode well for the private investment outlook. However, a couple of other challenges will likely drag out the rebound in private investment spending.
• How will Trump’s second term affect India? We see two main channels through which the real economy will be impacted by a second Trump presidency in 2025 and after. Trade tensions, mainly in the form of import tariffs, will increase, while sizeable fiscal stimulus will likely lift overall US goods and services import demand.

Download the full report to uncover our comprehensive analysis.