OPEC stated in a latest update that India’s economy has shown ongoing steady momentum, following strong economic growth in 1H25 of 7.4%, y-o-y, in 1Q25, and 7.8%, y-o-y, in 2Q25, driven by strong private consumption and solid expansion in the services sector. India’s economy expanded by 8.2%, y-o-y, in 3Q25, a six-quarter high. On the sectoral side, services output stood at 9.2%, y-o-y, following growth of 9.3%, y-o-y, in 2Q25. In contrast, manufacturing growth rose to 9.1%, y-o-y, on the back of higher electronics and automobile output, following 7.7%, y-o-y, in 2Q25. The overall momentum in these two industries continues to reflect resilient export demand and ongoing strength in domestic supply chains. On the expenditure side, private consumption remained strong on an annual comparison, rising by 7.9%, y-o-y, compared with 7.0%, y-o-y, in 2Q25. Fixed investment growth moderated to 7.3%, y-o-y, likely reflecting a gradual slowdown in central government capital spending.
Manufacturing strength is expected to soften somewhat as front-loaded export activity normalizes and as US trade uncertainty weighs somewhat on external demand. Central government capital expenditure is also expected to slow down due to fiscal consolidation targets, though it will continue, and easier financial conditions should cushion the impact. Domestic demand fundamentals remain healthy, supported by stable credit flows and improving corporate balance sheets.
After expanding by an average of 7.8%, y-o-y, over the first three quarters, India’s economy is expected to continue growing at a steady pace, with growth gradually normalizing. Overall, the outlook remains well supported by government fiscal measures, an increasingly accommodative stance from the central bank, and resilient domestic demand. The latter is reflected in the very strong vehicle sales recorded in October following the GST reform, a development that is expected to help sustain solid growth momentum through year-end and into 2026. OPEC noted that economic growth estimate for 2026 is revised up slightly to 6.6%, compared with 6.5% in the previous month.
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