October 3, 2025
India’s economic expansion slowed in FY2024–25 but policymakers are rolling out measures to support a rebound: the Reserve Bank of India (RBI) has signaled easier rules for external corporate borrowing, while the government has unveiled a record infrastructure spending plan to lift demand and create jobs.

India’s Growth Moderates While Policy Shifts Aim to Boost Investment and Credit

India’s gross domestic product grew by 6.5% in the fiscal year 2024–25, marking a deceleration from the previous year’s robust 9.2% pace. Analysts attribute the slowdown to a mix of global headwinds and domestic constraints that weighed on trade and investment during the period.

Looking ahead, the RBI projects a return to faster growth, forecasting 6.8% for FY2025–26 and expecting momentum to pick up in the second half of the year. To ease financing pressures on firms and support investment, the central bank has proposed relaxing external commercial borrowing norms — allowing eligible companies to raise up to $1 billion or 300% of their net worth, whichever is greater. The move is aimed at widening access to foreign credit and reducing borrowing costs for capital-intensive projects.

External forecasts paint a slightly more cautious picture: the United Nations has trimmed its projection for India’s 2025 growth to 6.3%, citing continuing global trade tensions and external uncertainties. Still, India remains one of the world’s fastest-growing large economies, buoyed by resilient domestic consumption and ongoing public investment.

Complementing the monetary and borrowing-side measures, the government announced an ambitious capital spending program of ₹11.21 trillion for the year ending March 2026. Officials say the package is designed to accelerate infrastructure delivery, generate employment, and catalyze private investment across transport, energy, and urban development projects.

Quick takeaways

GDP (FY2024–25): 6.5% (down from 9.2% prior year)
RBI growth forecast (FY2025–26): 6.8%
RBI proposal: loosen external commercial borrowing limits (up to $1bn or 300% of net worth)
UN forecast for 2025: 6.3%
Government capital spending plan (FY ending Mar 2026): ₹11.21 trillion