India GDP grows 7.7% in FY26: Q4 lifts data

Provisional FY26 estimates signal steady momentum

India’s economy grew 7.7% in FY26, according to provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday. The full-year figure marks an acceleration from 7.1% in FY25. The latest release also showed the economy expanded 7.8% in the January-March quarter, indicating that domestic activity remained firm through the end of the financial year.

The data comes amid a difficult global environment characterised by geopolitical risks, volatile energy markets, and uncertainty around global demand conditions. Even with these headwinds, the latest official numbers point to resilience in domestic demand, which helped cushion the economy.

What the MoSPI release says on GDP levels

MoSPI’s estimates also provided updated GDP levels under the revised series (base year 2022-23) and at constant prices. Real GDP, measured at constant 2022-23 prices, is estimated at Rs 323.12 lakh crore in FY26, compared with Rs 299.89 lakh crore in FY25.

Nominal GDP, which reflects both real growth and inflation, grew 8.9% to Rs 346.36 lakh crore in FY26. The gap between real and nominal growth highlights the role of price changes alongside output expansion during the year.

January-March quarter: growth at 7.8%

The January-March quarter performance was a key support for the full-year number. MoSPI estimated real GDP in the quarter at Rs 87.77 lakh crore, up from Rs 81.40 lakh crore in the year-ago period, translating into 7.8% growth.

Separate reporting on the quarterly sequence said the January-March growth moderated from an upwardly revised 8% in the previous quarter, even as it remained above the 7.0% growth recorded in the year-ago quarter. The latest numbers were also described as slightly above market expectations for a 7.6% expansion for FY26, helped by the stronger-than-anticipated January-March print.

How quarterly momentum looked earlier in FY26

While the January-March quarter was steady, other data points referenced during the period suggested some moderation from earlier peaks. GDP growth was reported at 7.8% in the December quarter of FY26, slowing from 8.4% in the preceding quarter, though still higher than expectations.

Fitch Ratings also noted that India’s GDP growth slowed to 7.8% in the third quarter of FY26, compared with 8.4% in the previous quarter. These snapshots align with a narrative of continued expansion, but with quarter-to-quarter variability.

Why domestic demand mattered in FY26

The provisional estimates were interpreted as a sign that domestic demand stayed resilient through the final months of FY26. Multiple references in the broader coverage pointed to strong services activity, manufacturing expansion, and steady domestic demand as key supports.

High-frequency indicators such as GST collections, manufacturing output, air travel and digital payments were cited as showing steady momentum, even as exports faced headwinds from slowing global trade. Policymakers and forecasters repeatedly linked the growth trajectory to the strength of domestic consumption and investment.

Forecasts and revisions: RBI, SBI, Fitch and the IMF

Alongside MoSPI’s provisional numbers, several institutions have published projections and risk assessments for FY26 and FY27.

The Reserve Bank of India (RBI) kept its FY26 growth forecast unchanged at 7.6%, and projected 6.9% growth for FY27. In its quarterly path for FY27, RBI projected 6.8% in Q1, 6.7% in Q2, before rising to 7% in Q3 and 7.2% in Q4, while warning that Iran war concerns, higher oil prices and geopolitical tensions could weigh on the outlook.

SBI Research projected FY26 growth at 7.5%, with FY27 growth expected to moderate to 6.6%. It also placed quarterly FY27 estimates at 6.8% in Q1, 6.6% in Q2, and 6.5% in both halves of the year, noting the projections could be revised as fresh data and geopolitical developments evolve.

Fitch Ratings said India is likely to grow 7.5% in the fiscal year ending March 2026, faster than its earlier 7.4% projection, citing resilient domestic demand even as activity slowed in January and February.

Globally, the International Monetary Fund (IMF) trimmed its 2026 growth forecast to 3.1% from 3.3%, citing supply chain disruptions linked to the Middle East conflict. Even so, India’s growth outlook was cited as being upgraded to 6.5%, supported by strong domestic demand.

Key risks flagged: oil, shipping routes and external demand

A recurring risk theme across forecasts was the impact of West Asia tensions on energy prices and trade routes. One risk scenario cited was that disruptions to key shipping routes such as the Strait of Hormuz could affect energy supplies, increase import costs, and push inflation higher.

Another explicit downside scenario referenced was that if oil prices consistently stay above $100 per barrel, GDP growth could be reduced by 0.5% to 1.0%, while also widening the deficit. Weaker global growth was also flagged as a channel that could reduce demand for Indian exports and lower remittance flows.

Finance Ministry view: resilience with medium-term capacity

The Finance Ministry, in its Monthly Economic Review (MER), said India’s outlook remains strong even as escalating geopolitical tensions in West Asia may inject volatility into global markets. It cited robust growth, historically low inflation, improving labour market indicators, and strengthening external and financial buffers.

In the same set of references, the ministry projected FY27 real GDP growth in the 7.0%-7.4% range, and also cited FY27 growth in the 6.8%-7.2% range, alongside an estimate of India’s potential growth at around 7%.

It also noted that in December 2025, RBI lowered its inflation forecast for FY26 from 2.6% to 2.0%, supported by a good kharif harvest and healthy rabi sowing. The IMF projects inflation at 2.8% in FY26 and 4.0% in FY27.

Snapshot table: FY26 GDP numbers and key forecasts

Why the FY26 print matters for markets and policy

A 7.7% real GDP print under the revised series provides a clear reference point for investors tracking India’s growth resilience amid global uncertainty. The 7.8% January-March expansion also suggests the economy entered the new financial year with momentum, even if quarterly growth has shown some moderation from earlier peaks.

For policy, the discussion is now shifting to how growth holds up against the risks highlighted by RBI and other forecasters, especially oil price volatility and any impact on inflation, external balances, and financial conditions. With multiple agencies projecting slower growth in FY27, the FY26 outcome also frames the base from which the next year’s performance will be judged.

Conclusion

MoSPI’s provisional estimates place India’s FY26 real GDP growth at 7.7%, supported by 7.8% growth in the January-March quarter and higher real GDP levels at constant prices. While institutions remain constructive on India’s domestic-demand story, they continue to flag risks from West Asia tensions, oil prices, and a slower global economy. The next set of official updates and policy commentary will be watched closely as FY27 projections range from the high-6% zone to the low-7% band, depending on how global shocks evolve.