Industry leaders have shown optimism that India’s economy can withstand global challenges arising from US tariffs. The GDP growth of 7.8 percent in the April-June quarter is attributed to a series of reforms implemented by the Modi administration over the past decade and its fiscal discipline, according to India Inc. They believe that India’s economy can maintain its growth trajectory, supported by robust domestic demand. With a growth rate of 7.8 percent, India remains the fastest-growing major economy, surpassing China’s 5.2 percent during the same period. CII President Rajiv Memani remarked that India’s economic growth illustrates its inherent strengths, including increased government spending, strong performance in services and manufacturing, and ongoing reforms.
CII Director General Chandrajit Banerjee highlighted that India’s real GDP growth of 7.8 percent in the first quarter of FY2025-26 emphasizes the country’s position as the fastest-growing large economy globally, especially amid significant global challenges. CII’s analysis of new project announcements indicates a promising revival of private capital expenditure, which, alongside government infrastructure initiatives, is likely to foster a new investment cycle. This is expected to bolster growth and create substantial employment opportunities. Banerjee expressed confidence that collaboration between industry and government will ensure continued resilient and inclusive growth. FICCI President Harsha Vardhan Agarwal noted that the unexpected 7.8 percent GDP growth for the first quarter of the fiscal year exceeded expectations.
He mentioned that tax relief in the budget, a 100 basis point reduction in the policy repo rate, favorable monsoon progress, and upcoming changes to GST rates will enhance domestic demand and provide necessary buffers against anticipated export weaknesses due to US tariffs. FICCI Senior Vice President Anant Goenka stated that the GDP figures reflect the Indian economy’s strength, driven by domestic demand. He believes that with the government’s reform acceleration in collaboration with states, new growth enablers will emerge soon. PHDCCI President Hemant Jain attributed the current resilience of the economy to significant structural reforms over the past decade across various sectors, including infrastructure and manufacturing.
He expressed confidence in achieving a 7 percent growth rate for the current fiscal year. Vinnie Mehta, Director General of ACMA, emphasized that the 7.8 percent GDP growth illustrates strong domestic demand and resilient manufacturing, providing confidence to the auto component industry to invest and expand exports despite global challenges. Assocham Secretary General Manish Singhal pointed out that reforms, including income tax exemptions from the Budget, have significantly boosted consumption, and anticipated reforms like GST are expected to further enhance growth prospects, making a GDP growth of 7 percent for the fiscal year achievable based on government initiatives.