India GDP grows 7.7% in FY26 as Q4 hits 7.8%

Provisional GDP prints above estimates

India’s economy expanded faster than expected in the January-March quarter of FY26, helping full-year growth come in slightly above earlier projections. Provisional national accounts data released on Friday put Q4FY26 real GDP growth at 7.8% year-on-year. For FY26 as a whole, India’s real GDP growth was pegged at 7.7%, marginally above the government’s earlier estimate of 7.6%. The full-year number also marked an acceleration from the 7.1% growth recorded in FY25, according to the same release. The fourth-quarter performance mattered because it lifted the annual reading despite concerns that the conflict in West Asia, which intensified in March, could weigh on activity. The data is part of the revised GDP series with the base year set at 2022-23.

Q4 growth beats RBI and economist forecasts

The March-quarter expansion of 7.8% surpassed the Reserve Bank of India’s estimate of 7% for the quarter. It also came in above the 7.2% forecast cited from economists surveyed by Reuters and Bloomberg. The Q4 reading was lower than the previous quarter’s upwardly revised 8% growth, but it was stronger than the 7% growth recorded in the year-ago January-March quarter. The official commentary around the release suggested the West Asia crisis had only a limited effect on economic activity during the quarter. Separately, coverage of the release attributed the stronger-than-expected growth to strong government spending and a robust services sector.

Full-year GDP at 7.7% after a revision

For FY26, the statistics office revised the full-year growth figure upwards by 10 basis points to 7.7% from its February estimate. The earlier Second Advance Estimates had pegged FY26 growth at 7.6%. Official data also placed India’s FY26 expansion above market expectations of about 7.6% for the year. The annual growth was supported by the momentum seen in the March quarter, even as growth moderated from the December quarter’s 8% print.

Sector performance: services lead, construction stays firm

Quarterly sector-wise data showed a sharp divergence in growth rates across sectors. Trade, hotels, transport, communication, broadcasting and storage-related services expanded 12.5% year-on-year in Q4FY26, the strongest among the highlighted segments. Financial, real estate and professional services grew 10.4% in the same quarter, underscoring the continuing strength in services. Manufacturing recorded a 7.3% increase during the quarter. Construction grew 8.4% year-on-year, aligning with commentary that investment activity and expansion in the construction and tertiary sector supported demand.

Real GDP and nominal GDP: what the levels show

At constant prices, real GDP for the January-March quarter was estimated at ₹8,777,000 crore, up from ₹8,140,000 crore in the corresponding period of the previous fiscal year. Nominal GDP in Q4FY26 was estimated at ₹9,465,000 crore, reflecting growth of 9.1%. For FY26, real GDP was projected to reach ₹32,312,000 crore, compared with the First Revised Estimate of ₹29,989,000 crore for FY25. Nominal GDP for FY26 was estimated at ₹34,636,000 crore, representing an 8.9% increase over the previous year. Another data point in the coverage noted FY26 nominal GDP growth of 8.9% was lower than 9.7% recorded in the previous year.

Key GDP and demand indicators at a glance

Additional signals: GVA and consumption

The data set also showed Gross Value Added (GVA) growth at 7.9% in FY26, up from 7.3% in FY25, pointing to broader strength across sectors. On the demand side, private final consumption expenditure (PFCE) grew 7.1% compared with 5.6% in the previous year, as cited in one report on the release. These indicators matter because they provide a cross-check beyond headline GDP, including how household demand and underlying production-side activity evolved through the year.

Market impact: why investors track these prints

For markets, the Q4 surprise and the upward revision to FY26 growth can influence how investors assess earnings sensitivity in cyclical sectors and the trajectory of macro variables. The data also helps shape expectations around policy discussions, especially when growth comes in above central bank estimates. At the same time, the release noted the outlook for the rest of the year has been clouded by the war in West Asia, even as the quarterly data suggested limited immediate disruption. In another public remark reported alongside the GDP release, Chief Economic Adviser V Anantha Nageswaran said that with upward momentum in retail inflation, nominal GDP growth in FY27 is expected to be higher than the number used in the budget estimates.

Official response and what comes next

MoSPI Secretary Saurabh Garg described the FY26 growth outcome as higher than anticipated in the Second Advance Estimate and said it reflects the “resilience and robustness” of the Indian economy despite global headwinds. The provisional estimates replace the Second Advance Estimates released in February 2026. The next scheduled GDP release mentioned in the coverage is for the April-June quarter of FY27, due on August 31, 2026. That print will be the next formal checkpoint for how growth and nominal activity evolve after the FY26 close.

Conclusion

India’s provisional FY26 GDP data showed 7.7% real growth, supported by a stronger-than-expected 7.8% expansion in the March quarter. Services and construction were notable contributors, while nominal GDP grew 8.9% for the year. The key near-term focus shifts to the next quarterly release on August 31, 2026, which will provide the first official read on FY27 momentum under evolving global conditions.