India’s GDP grows 6.3% as manufacturing shrinks in Q2FY23

India’s economy represented by gross domestic product (GDP) grew 6.3% in the July-September quarter of FY23, helped by strong activity in the services sector, despite manufacturing output contracting unexpectedly.

In comparison, the economy had expanded 13.5% in the June quarter of FY23 due to a low base in the same period of FY22 as the economic activity in the second quarter of FY22 was severely affected by the Delta wave of the pandemic. Further, GDP growth was 7.6% in the September quarter of FY23 over the corresponding period in FY20.

India’s National Statistical Office released the data which showed that manufacturing industry contracted 4.3% in the September 2022 quarter due to rising raw material costs weighing on corporate India’s profit margins. Mining & quarrying contracted 2.8 per cent, while agriculture, forestry and fishing industry rose 4.6%.

However, the services sector, including the three segments — trade, hotel, transport, communication and broadcasting services; financial, real estate & professional services; and public administration, defense and other services — grew 14.7%, 7.2% and 6.5%, respectively.

Chief Economic Advsior V Anantha Nageswaran said that the Indian economy is on track to achieve a 6.8-7% GDP growth in the current fiscal. He further said the economic recovery momentum is continuing and the GDP is averaging the 2019-20 level.

Meanwhile, global credit rating agency S&P Global Ratings said in a report that India’s gross domestic product (GDP) growth would be at 7% for 2022 and 6% for 2023, and the forecast has been lowered by 50 basis points for the next two fiscal years due to slower global demand growth.