Page 11 - Policy Economic Report - September 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Uncertainty over when measures will apply often triggers pre-emptive reactions. Firms rush shipments
before tariff deadlines – a practice known as “front-loading” – often switching to faster and more costly
forms of transport. For example, air shipments to the US jumped nearly 10% the first quarter of 2025
compared to the same period a year before.

Overall imports to the US surged in the first quarter as goods were front-loaded, then dropped sharply in
the second quarter, once tariffs took hold – showing that uncertainty itself can be more disruptive than
tariffs.

Diversification key for resilience
Two factors can reduce vulnerabilities: diversified export markets and participation in trade agreements.

• Firms with multiple markets can redirect shipments when one closes, cushioning losses.
• Countries with broader export bases offset downturns in one region with gains elsewhere.
• Trade agreements provide rules and dispute settlement mechanisms, reducing shocks and

encouraging long-term investment.

5. Indian Economy

India’s economic growth

The National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI)
released the Quarterly Estimates of Gross Domestic Product (GDP) for the April-June Quarter (Q1) of
Financial Year (FY) 2025-26. The key highlights are as follows: -

• Real GDP has been estimated to grow by 7.8% in Q1 of FY 2025-26 over the growth rate
of 6.5% during Q1 of FY 2024-25.

• Nominal GDP has witnessed a growth rate of 8.8% in Q1 of FY 2025-26.

• Agriculture and Allied Sector has observed the Real GVA growth rate of 3.7%, as compared to the
growth rate of 1.5% registered in Q1 of last financial year.

• Secondary Sectors, prominently Manufacturing (7.7%) and Construction (7.6%) Sector has
registered above 7.5% growth rate at Constant Prices in this quarter.

• Mining & Quarrying (-3.1%) and Electricity, Gas, Water Supply and Other Utility Services
Sector (0.5%) has seen moderated Real growth rate during Q1 of FY 2025-26.

• Tertiary Sector (9.3%) has recorded substantial growth rate at Constant Prices in Q1 of FY 2025-
26, over the growth rate of 6.8% in Q1 of FY 2024-25.

• Government Final Consumption Expenditure (GFCE) has bounced back, registering 9.7% growth
rate in Nominal terms during Q1 of FY 2025-26, over the growth rate of 4.0% in Q1 of FY 2024-25

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