India's economy outperforms peers as it surges 7.4% in Q1
Gross domestic product in Asia's third-largest economy was above a forecast year-on-year growth of 6.7% in a Reuters poll, and was up from a revised 6.4% expansion in the previous quarter, official data released on Friday showed.
It was the fastest increase in GDP since January-March 2024.
'India's growth is holding up in a growth-scarce environment,' said V. Anantha Nageswaran, India's chief economic adviser, after the release of the data, adding India outshone other large and contemporary economies.
They include China, which grew 5.4% in January-March.
The Reserve Bank of India (RBI) expects GDP growth of 6.5% in the fiscal year beginning April 1. At that rate, India will remain the fastest growing major economy and could match Japan for size this year at $4.18 trillion, according to projections by the IMF.
The gross value added (GVA), seen as a more accurate measure of underlying economic activity, grew 6.8% in the first three months of 2025, compared to a revised expansion of 6.5% in the previous quarter. GVA strips out indirect taxes and government subsidy payouts, which tend to be volatile.
Manufacturing output rose 4.8% year-on-year in January-March, the final quarter of India's fiscal year, compared with a revised expansion of 3.6% in the previous quarter, while construction activity jumped 10.8%, up from 7.9% in the previous quarter.
'The GDP print for Q4 is higher than expected. This indicates that the economy has recovered from the slowdown seen in the middle of last year,' said Sakshi Gupta, principal economist, HDFC bank.
However, the outlook for the current fiscal year faces challenges given a global slowdown and tariff uncertainties, she said, referring to U.S. President Donald Trump's tariff hikes.
Trump proposed reciprocal tariffs of 26% on imports from India but they are on hold until July 9 as trade talks continue.
Growth in private consumer spending, which accounts for 57% of Indian GDP, eased to 6% year-on-year in January-March, from an upwardly revised 8.1% expansion in the previous quarter, as urban spending weakened whereas rural demand for durables and farm equipment like tractors improved.
Retail inflation, which eased to a near six-year low of 3.16% in April, alongside a favourable monsoon forecast, is expected to keep food prices in check and pave the way for the Reserve Bank of India to cut its policy repo rate again next month.
Government spending fell 1.8% in the three months through March compared to a revised expansion of 9.3% in the previous quarter, the data showed. Capital spending rose 9.4% in the quarter though private firms are expected to delay investments amid global uncertainties including trade tariffs.
Growth for the fiscal year was estimated at 6.5% and the size of the Indian economy rose to 330.68 trillion rupees ($3.87 trillion) as of the end of March.
Economists said that while economic growth in the current fiscal year could be affected by global uncertainties weighing on near term investment intentions, a strong monsoon, tax cuts announced by the government and continued interest rate cuts could support domestic demand.
New Zealand hails trade talks: New Zealand's deputy prime minister said on Friday that talks over a free trade agreement between his country and India were ongoing, but he didn't provide a timeline for when the two nations could eventually sign a deal.
Winston Peters, who is on a two-day visit to India, said that the negotiations were 'going with real meaning now,' calling them 'a breakthrough in our economic relationship.'
India and New Zealand began negotiations in March for a trade pact, and had aimed to sign a deal in 60 days. The deal will significantly bolster economic ties between the two countries, but it has faced delays because of differences over tariffs on dairy products.
Bilateral trade between India and New Zealand stood at $1.7 billion in the 2023-24 financial year.
Talks between India and New Zealand were taking place amid global trade tensions, after US President Donald Trump's decision to impose now-paused reciprocal tariffs on imported goods from several countries, including India.
Earlier this month, India and the United Kingdom clinched a trade deal. India is also engaged in trade talks with Washington.
Peters, who met with India's Group of 20 emissary, Amitabh Kant, in New Delhi, said that India was New Zealand's 12th-largest partner in trade and 'we are determined that we're going to work to change that.'
'Our strengths, from food and beverage products to agriculture, forestry, horticulture, education and tourism are world class. And our innovation in areas like outer space and renewable energy will find a welcoming partner in India,' he said.
Peters said that the relationship between the two countries extended to defense and security, calling it a 'priority for New Zealand in the Indo-Pacific.'
Agencies
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Etihad
an hour ago
- Al Etihad
Louis Vuitton Korea says systems breach led to customer data leak
4 July 2025 15:09 SEOUL (REUTERS)A systems breach at Louis Vuitton Korea in June led to the leak of some of customer data including contact information, but did not involve customers' financial information, the luxury brand's South Korea unit said on Friday."We regret to inform that an unauthorized third party temporarily accessed our system resulting in the leak of some customer information," the unit said in a company became aware of the breach on Wednesday and had notified government authorities, the statement had been taken to contain the breach and to boost system security, it added. The South Korean units of two other labels, Christian Dior Couture and Tiffany, under the world's largest luxury group have been under government investigations since May for customer data leaks they reported earlier in the year, according to the country's Personal Information Protection Commission.
Al Etihad
an hour ago
- Al Etihad
Stocks and dollar dip as Trump's spending bill passes, trade deal deadline nears
4 July 2025 15:21 LONDON (REUTERS)Stocks slipped on Friday as US President Donald Trump got his signature tax cut bill over the line and attention turned to his July 9 deadline for countries to secure trade deals with the world's biggest dollar also fell against major currencies with US markets already shut for the holiday-shortened week, as traders considered the impact of Trump's sweeping spending bill which is expected to add an estimated $3.4 trillion to the national pan-European STOXX 600 index fell 0.8%.US S&P 500 futures edged down 0.6%, following a 0.8% overnight advance for the cash index to a fresh all-time closing peak. Wall Street is closed on Friday for the Independence Day said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on exports to the United States, a clear shift from earlier pledges to strike scores of individual deals before a July 9 deadline when tariffs could rise are "now just waiting for July 9," said Tony Sycamore, an analyst at IG, with the market's lack of optimism for trade deals responsible for some of the equity weakness in export-reliant Asia, particularly Japan and South the same time, investors cheered the surprisingly robust jobs report on Thursday, sending all three of the main US equity indexes climbing in a shortened session."The US economy is holding together better than most people expected, which suggests to me that markets can easily continue to do better (from here)," Sycamore the close, the House narrowly approved Trump's signature, 869-page bill, which averts the near-term prospect of a US government default but adds trillions to the national debt to fuel spending on border security and the military. Trade the Key Focus in Asia Trump said he expected "a couple" more trade agreements after announcing a deal with Vietnam on Wednesday to add to framework agreements with China and Britain as the only successes so Treasury Secretary Scott Bessent said earlier this week that a deal with India is close. However, progress on agreements with Japan and South Korea, once touted by the White House as likely to be among the earliest to be announced, appears to have broken US dollar index had its worst first half since 1973 as Trump's chaotic roll-out of sweeping tariffs heightened concerns about the US economy and the safety of Treasuries, but had rallied 0.4% on Thursday before retracing some of those gains on of 1100 GMT it was down 0.1% at euro added 0.2% to $1.1773, while sterling held steady at $ US Treasury bond market is closed on Friday for the holiday, but 10-year yields rose 4.7 basis points (bps) to 4.34%, while the 2-year yield jumped 9.3 bps to 3.882%.Gold firmed 0.4% to $3,336 per ounce, on track for a weekly gain as investors again sought refuge in safe-haven assets due to concerns over the US's fiscal position and tariffs. Brent crude futures fell 64 cents to $68.17 a barrel, while US West Texas Intermediate crude likewise dropped 64 cents to $66.35, as Iran reaffirmed its commitment to nuclear non-proliferation. Stock Markets Continue full coverage
Al Etihad
7 hours ago
- Al Etihad
China urges caution - and speed - on assisted-driving technology
4 July 2025 09:14 BEIJING (REUTERS)China's automakers are outpacing foreign rivals in their push for assisted-driving technology, eager to woo motorists hungry for rapid Beijing has a nuanced message for its rising stars: move fast - but be this week have been finalising new safety rules for driver-assistance systems as Beijing sharpens scrutiny of the technology following an accident involving a Xiaomi SU7 sedan in March. That incident killed three occupants when their car crashed seconds after the driver took control from the assisted-driving Chinese officials want to prevent carmakers from overselling the capabilities of such systems, they are also threading the needle between innovation and safety to ensure their automakers don't lose out to US and European clear regulations for assisted-driving tech without slowing its advancement could give China's industry an edge over global competitors, analysts say. This approach is in stark contrast to the US market, where companies pursuing autonomous cars have expressed frustration that the government has not implemented a regulatory system to validate and test the Muessig, auto industry lead at Accenture Greater China, said China's regulators and industries have long followed former Chinese leader Deng Xiaoping's "feel the stones to cross the river" philosophy. The expression means to steadily explore new, uncertain technologies, which "has proven very successful for this market," he Chinese regulations allow systems that automatically steer, brake and accelerate under certain conditions while requiring the driver to stay engaged. For that reason, marketing terms such as "smart" and "autonomous" are new rules will focus on hardware and software designs that monitor a driver's state of awareness and their capacity to take control in do this, regulators enlisted Chinese automaker Dongfeng and tech giant Huawei to help draft new rules and have sought public input over a month-long period, ending the same time, government officials are pressing Chinese automakers to rapidly deploy even more-advanced systems, known as Level 3 assisted-driving, which allow drivers to take their eyes off the road in certain situations. Level 3 is the midway point on the industry's autonomous-driving scale, from basic features like cruise control at Level 1, to self-driving capability under all conditions at Level Chinese government had tapped state-owned Changan to be the first automaker to begin Level 3 validation tests in April, but the plan was paused after the Xiaomi crash, said a source familiar with the regulatory planning still hopes to resume such tests this year and approve the country's first Level 3 car in 2026, the source Ministry of Industry of Information Technology and Changan did not respond to requests for comment. Xiaomi has said it is cooperating with a police investigation into the systems are seen by industry analysts as the next big battleground in China's hyper-competitive car the past decade, Level 2 systems have proliferated in China, including Tesla's Full Self Driving system, as well as the Xiaomi feature involved in the March crash. The capability ranges from basic vehicle following on highways to handling most tasks on busy urban roads, under driver have pushed down hardware costs to levels that allow them to offer Level 2 features at little or no extra cost. China's No. 1 automaker BYD has rolled out its "God's Eye" assisted-driving software for free across its entire product line-up. More than 60% of new cars sold in China this year will have Level 2 features, according to an estimate from research firm RaceIn its push for assisted-driving technology, and ultimately fully self-driving cars, Beijing is seeking to help homegrown carmakers just as it supported China's rapid rise to become the world's electric-car year, China's government lined up nine automakers for public tests to advance the adoption of self-driving their Level 3 push, Chinese regulators also are upping the regulatory ante by holding automakers and parts suppliers liable if their systems fail and cause an accident. Legislation passed in Britain last year adopted a similar approach to the Shanghai auto show in April, several companies touted progress toward rolling out vehicles with Level 3 capability. Tech giant Huawei said it is ready to introduce a Level 3 system for highways after simulated testing of more than 600 million kilometers. It showed a video of drivers and passengers singing karaoke as the car drove Zeekr brand debuted the luxury SUV 9X, featuring Level 3 software the automaker said is ready for mass production in the third quarter if regulations allow. Zeekr is also applying to be part of a second batch of automakers to undergo government Level 3 validation traditional automakers at the Shanghai auto show such as Mercedes-Benz and Volkswagen said they were pushing their most advanced assisted-driving features but stopped short of crossing the Level 3 liability line. Getting there is a challenge as they are already at a cost disadvantage against their Chinese rivals, analysts CTO Markus Schaefer told Reuters that while chip and computing power prices have fallen, the additional safety required for Level 3 will cost much more. "It's a moving target," Schaefer said.
