India GDP growth hits 7.7% in FY26, Q4 at 7.8%

Key takeaways from the latest GDP print

India’s economy expanded 7.7% in real terms in FY2025-26, with growth accelerating to 7.8% year-on-year in the January-March quarter, according to provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) and data from the National Statistics Office (NSO). The figures came despite external sector headwinds linked to the ongoing conflict in West Asia, which has disrupted global energy supplies. The full-year growth is higher than the 7.1% expansion recorded in FY2024-25. Q4 growth also stood out because it followed an 8.0% print in the December quarter, which was later described as upwardly revised in commentary around the release.

The NSO data was released with a revised 2022-23 base year. Officials and political leaders framed the print as evidence of resilience, supported by investment activity and domestic demand. At the same time, the Reserve Bank of India (RBI) flagged near-term risks, lowering its FY2026-27 (FY27) growth forecast to 6.6% from 6.9% estimated in April.

What MoSPI and NSO data showed

MoSPI said real GDP, measured at constant prices, was estimated at ₹323.12 lakh crore in FY26, compared with ₹299.89 lakh crore in FY25. In normalized terms, that is ₹32,312,000 crore in FY26 versus ₹29,989,000 crore in FY25. Nominal GDP, measured at current prices, was estimated at ₹346.36 lakh crore in FY26, compared with ₹318.07 lakh crore in FY25, implying a growth rate of 8.9%. In normalized terms, nominal GDP was ₹34,636,000 crore in FY26 versus ₹31,807,000 crore in FY25.

The GDP growth rate for the January-March quarter of FY26 was estimated at 7.8%. The NSO release also noted that FY26 growth of 7.7% was higher than the 7.6% figure in the second advance estimates published in February. Alongside the FY26 print, the data offered a snapshot of how the economy held up even as global conditions became more uncertain.

Political reactions: reforms, resilience, and reform messaging

Prime Minister Narendra Modi and Defence Minister Rajnath Singh both highlighted the FY26 and Q4 figures as a sign of the economy’s underlying strength. Modi said the 7.7% growth rate reflected the “inherent strength” of the economy, the “success of reforms,” and the “hard work of 140 crore Indians,” and stated that the government would continue efforts to improve “Ease of Living” and “Ease of Doing Business.”

Rajnath Singh said the data underscored resilience built over the last 12 years through the “Reform, Perform, Transform” approach. Finance Minister Nirmala Sitharaman said the government was committed to further driving the “Reform Express” with decisive policy measures to maintain positive momentum amid global challenges. These statements came as the West Asia conflict continued to affect energy markets and supply chains.

What helped growth in Q4, despite West Asia disruptions

The Jan-March quarter growth of 7.8% was attributed in the report narrative to strong investment, sustained farm production, and expansion in construction and the tertiary sector. The same account said these factors supported robust demand and helped offset the anticipated adverse impact of the conflict in West Asia. Another strand of commentary around the GDP print pointed to strong consumer spending and investment activity supporting momentum.

Economist Yuvika Singhal of QuantEco Research described the Q4 data as showing notable resilience, with growth easing only marginally to 7.8% from an upwardly revised 8.0% in Q3 FY26. She also cited support from reduced US tariff levels, sustained government-led capital expenditure, and residual benefits from GST rate rationalisation. Ranen Banerjee, Partner and Leader, Economic Advisory at PwC India, said the strong performance of manufacturing, trade, travel and services contributed to the strong print.

Revised estimates versus earlier expectations

MoSPI’s Secretary Saurabh Garg said FY26 growth came in higher than anticipated in the second advance estimates, reflecting resilience despite global headwinds. The NSO release similarly compared the final FY26 growth estimate of 7.7% against the 7.6% second advance estimate released in February.

The GDP data also came against a backdrop of debate over how long the current pace can be sustained. While the FY26 print retained India’s positioning as the fastest-growing major economy in the commentary around the release, some economists cautioned that maintaining the momentum could be difficult as the full impact of the West Asia conflict plays through energy prices and supply disruptions.

Market impact and the RBI’s FY27 downgrade

The RBI lowered its GDP forecast for FY27 to 6.6% from 6.9%, citing elevated energy and other commodity prices and continued supply disruptions arising from the conflict in West Asia. This matters for markets because GDP expectations feed into corporate revenue assumptions, credit demand, and the broader policy conversation around inflation, rates, and fiscal priorities.

The FY26 GDP print suggests domestic drivers remained firm, but the RBI’s revised forecast highlights that external conditions can still influence growth through imported inflation and supply shocks. Investors tracking India’s macro story are likely to weigh the strong realised FY26 performance against the central bank’s more cautious FY27 outlook.

Summary table: key published GDP numbers

Why the FY26 print matters

FY26 growth at 7.7%, along with 7.8% in Q4, strengthens the case that India’s domestic economy stayed supportive even when external risks increased. The comparison with FY25’s 7.1% expansion indicates an acceleration in headline growth. The higher-than-advance-estimate outcome also signals that activity held up better than earlier projections.

But the RBI’s forecast cut underscores that the macro environment for FY27 could be less straightforward, especially if energy and commodity pressures persist and supply disruptions continue. The combination of a strong FY26 base and a moderated FY27 forecast sets up a sharper focus on how investment, consumption, and government capex evolve under global uncertainty.

Conclusion

India’s economy grew 7.7% in FY2025-26 and 7.8% in the March quarter, according to MoSPI and NSO data, exceeding the pace seen in FY2024-25 and coming in above earlier advance estimates. Political leaders linked the performance to reforms and domestic resilience, while economists pointed to investment, consumption, and sectoral strength. The next key macro signpost will be how growth tracks in FY27 against the RBI’s revised 6.6% forecast, shaped partly by commodity prices and supply conditions tied to the West Asia conflict.