Southern States Lead India’s Economy With 31% GDP Share; Maharashtra Remains Largest Contributor

The southern region remains the largest contributor to India’s gross domestic product (GDP), accounting for approximately 31% of national output in FY25, according to the latest Rubix Data Sciences report.

The report stated that India's economic output remains heavily concentrated in a handful of states, with 10 accounting for nearly 70% of national GDP. As per state-level economic performance across ten indicators from FY15 to FY25, South has emerged as the dominant regional engine, contributing approximately 31% of national GDP in FY25, marginally ahead of the North at 30%.

Four southern states — Tamil Nadu, Karnataka, Telangana and Andhra Pradesh — together raised their combined share of national output from 25% in FY15 to 27% in FY25. Karnataka led on growth, recording an average real rate of 7.9% over the decade, followed by Telangana at 7.1%, Andhra Pradesh at 6.9% and Tamil Nadu at 6.8%.

Maharashtra remains the single largest contributor to national GDP, though its share has moderated from 15% in FY15 to 13% in FY25. Gujarat recorded the highest average real growth rate among the larger state economies at 7.9%, and alongside Maharashtra and Tamil Nadu accounts for roughly 61% of India's goods exports.

The South's lead extends beyond aggregate GDP figures. Telangana, Karnataka and Tamil Nadu recorded the highest per capita net state domestic product among the larger states in FY25, at ₹3.88 lakh, ₹3.81 lakh and ₹3.62 lakh, respectively — outpacing Maharashtra at ₹3.09 lakh. All three also exceeded 6 per cent annual growth in per capita income over the decade, suggesting the region's expansion is translating into tangible improvements in living standards rather than merely inflating headline numbers.

The South's lead extends beyond aggregate GDP figures. Telangana, Karnataka and Tamil Nadu recorded the highest per capita net state domestic product among the larger states in FY25, at ₹3.88 lakh, ₹3.81 lakh and ₹3.62 lakh respectively — outpacing Maharashtra at ₹3.09 lakh.

Uttar Pradesh, Maharashtra and Gujarat together accounted for nearly 30% of total capital expenditure in FY25, while the top 10 states contributed about 67% of overall capex. Industrial credit was similarly skewed, with the western and northern regions each accounting for 34% of total credit.

The report noted a gradual shift in investment patterns, with states such as Tamil Nadu, Odisha and Uttar Pradesh increasing their share of new investments, even as western states continue to dominate overall capital stock.

The report further highlighted growth in traditionally lagging states. Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh saw significant increases in output and per capita income over the past decade, indicating a gradual broadening of economic activity.

"India's growth story is fundamentally a state-level story," said Mohan Ramaswamy, Founder and Chief Executive of Rubix Data Sciences. "Concentration risk remains real. How effectively emerging states convert current investment momentum into durable industrial capacity will define India's next growth phase," he added.