Page 13 - FIPI - Policy Economic Report - May 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

fold increase. For small island developing states – many of which are in the Caribbean – trade-weighted
average tariffs have already increased five-fold from 1.7% to 8.5% and could further increase to almost
10%.

5. Indian Economy

India’s economic growth

According to the mid-year update of UN’s World Economic Situation and Prospects, India’s growth is
projected at 6.3 per cent in the current fiscal year, the highest among large economies. This momentum
is expected to continue into 2026, with growth estimated at 6.4 per cent. In contrast, the global outlook
remains subdued amid rising trade tensions, policy uncertainty, and a decline in cross-border
investments.

Figure 5: Global economic growth projections for 2025

7.00%

6.30%

6.00%

growth projections % 5.00% 4.60%
4.00%

3.00% 2.40%
2.00%
1.60%

1.00%

0.00%

India China USA World

Source- World Economic Situation & Prospects 2025

According to the report, India’s growth is being driven by strong domestic demand and consistent
government spending. These factors have supported stable employment and helped contain inflation,
which is expected to fall within the Reserve Bank of India’s target range. Financial markets are also
reflecting this optimism. Stock indices have shown solid gains, backed by sustained investor confidence.
Manufacturing activity is picking up, helped by favorable policies and resilient external demand. Exports,
especially in strategic areas like defense production, are expanding steadily. Together, these indicators
show that India’s economy is not only holding firm but also making headway in an uncertain global
environment.

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