The BGA India Team, led by Managing Director Ratan Shrivastava, wrote an update to clients on India’s evolving economic prospects. The update examined the context for the development, its significance as well as implications for businesses.


The Indian economy experienced an extraordinary economic recovery in the first quarter of fiscal 2021-22. During this period, which began April 1, gross domestic product (GDP) grew at a record high of 20.1 percent, compared to a contraction of 24.4 percent in the same quarter a year earlier.

The economic rebound has come despite a severe second wave of Covid-19 infections. The wave, which roughly peaked from April-May 2021, had forced states to reimpose localized lockdowns and curb mobility.


The surprisingly high growth on the back of a low base from the previous year reflects broader underlying trends. These include a rebound in private investment, improved construction and manufacturing activities and resilience of merchandise exports.

Estimates of the first quarter of 2021-22 affirm a V-shaped recovery. Key economic and monetary indicators highlight an uptick in economic activity, driven by the easing of state-wide restrictions and growing confidence in the widening vaccination coverage (with 700 million doses administered and covering more than 50 percent of the eligible population with at least one dose by September 2021).


It will be important to observe how sustainable this growth trajectory remains for the rest of this fiscal year. While India’s recovery has been impressive, the first quarter’s performance is still 9.2 percent lower than the pre-pandemic level. Additionally, while there has been an upsurge in some productive parts of the economy, the pace at which this will continue will derive strength from continued policy support, regulatory certainty, the provision of fiscal incentives to industries and a pick-up in consumption spending, which constitutes more than half of India’s GDP.

Several industries are likely to showcase strong green shoots. Based on the index of industrial production’s trends, sectors likely to showcase strong green shoots include manufacturing, agriculture, mining, electricity, consumer durables and capital goods.

BGA will continue to keep you updated on developments in India as they occur. If you have any questions or comments, please contact BGA India Managing Director Ratan Shrivastava at