India in a 'sweet spot', GDP growth to top 7% this fiscal year: FICCI President

India is "in a sweet spot" to sustain growth, and the GDP is expected to expand by over 7 per cent this financial year on the back of strong macro fundamentals and ongoing reforms, new FICCI President Anant Goenka said on Tuesday.

Goenka also said that the chamber's focus for the coming year would be to increase the share of the manufacturing sector in the GDP from its current 15-17 per cent to 20-25 per cent levels over time.

Also Read: India Q2 GDP growth quickens on year to 8.2%, a six-quarter high


To make sure that happens, the chamber has outlined priorities such as increasing R&D spending from 0.7 per cent to over one per cent of GDP; strengthening industry-academia partnerships, supporting the government's efforts to further promote ease of doing business, trade and supply chain security, and enhancing manufacturing excellence which includes focus on quality, women in the workforce, and adopting sustainable practices.

"I think GDP should be 7 plus kind of level (during 2025-26). After all the changes that have happened with respect to the income tax slab, GST changes, and labour code changes, I think that with the reforms coming in, the macros of India are looking very strong," he told PTI in an interview.

Challenges at the trade front too will be resolved in a "very" short period of time, he said, adding, "so to that extent, we're in a sweet spot. Private investment capex is also something which is ready for a change."

As capacity utilisation rises, greenfield investments by industry will also pick up, he said.

India's economy grew at a higher-than-expected 8.2 per cent - the fastest pace in six quarters - in July-September, as front-loading of production ahead of GST rates cut boosted consumption that helped offset the impact of steep US tariffs.

The 8.2 per cent gross domestic product (GDP) growth, which follows a 7.8 per cent expansion in the preceding April-June quarter, helped India retain the title of the world's fastest growing major economy, according to official data released on Friday.

The expansion, which was more than China's 4.8 per cent, was driven by higher public investments, services demand, industrial output and firm consumption, besides statistical effects of a low base (the economy grew at a below-average 5.6 per cent in the same quarter last fiscal).

The newly appointed President, who is also Vice-Chairman of RPG group, said that the chamber will also work with states on further improving the business climate of the country.

When asked about the challenges for reviving private investments in the country, he said there were various challenges like insolvency issues, drying up of demand due to the COVID pandemic and the global trade uncertainty.

However, he added: "We are coming to an end of some of these challenges, and we're seeing all the macros are fairly positive."

Goenka said that steps taken to boost domestic demand, such as the GST rate cut, have yielded results.

"Initially, rural demand was weak because of inflationary impact post-COVID, and more recently, it's been semi-urban, urban. There's been a slight slowdown, but now the data is showing a positive shift," he said.

At the ease of doing business front, he suggested further simplification of rules and promotion of trust-based governance.