India’s real GDP growth rate has been projected at 7.4% in the current financial year, driven by robust consumption, policy reforms, and improving investor sentiment.
New Delhi: The fantastic growth journey of India continues and 2026 promises to be another record-breaking year for the country’s economy. New India’s real GDP growth rate has been projected at 7.4 per cent in FY 2025-26, up from 6.5 per cent during FY 2024-25, according to the advanced estimates released by the Ministry of Statistics this week.
The buoyant growth in the services sector has been found to be a major driver with a robust growth of 9.9 per cent at constant prices in FY 2025-26 for financial services, real estate, professional services, and public administration. Trade, hotels, transport, and communication and services related to the broadcasting sector have been estimated to grow by 7.5 per cent, the official statement said.
Manufacturing and construction in the secondary sector have been estimated to achieve a growth rate of 7 per cent, while the agriculture sector growth rate is estimated at 3.1 per cent. Real Private Final Consumption Expenditure (PFCE) has been estimated to attain a growth rate of 7 per cent during FY 2025-26, backed by the income tax exemptions announced in the Budget for 20205-26 and subsequent GST rate cuts across goods and services.
India’s GDP growth had accelerated to a robust 8.2 per cent in the second quarter (July-September) of the current financial year compared to the corresponding figure of 5.6 per cent during the same quarter of FY 2024-25, according to figures released in November.
The manufacturing sector clocked a strong growth rate of 9.1 per cent, while the construction segment grew at 7.2 per cent in the secondary sector during the quarter. The growth rate of the financial, real estate, and professional services in the tertiary sector jumped by a double-digit 10.2 per cent in Q2 of FY 2025-26.
The real GDP growth rate now works out to an impressive 8 per cent for the first half H1 (April-September) of FY 2025-26, as compared to the growth rate of 6.1 per cent in H1 of FY 2024-25, the figures showed.
The figures also show that India continues to be the world’s fastest-growing major economy despite global headwinds. The IMF has forecast India to be the only economy that is expected to clock an over 6 per cent growth rate in 2025-26, as the US tariff turmoil is expected to disrupt world trade and slow down the growth of the global economy.
India’s economic growth is expected to outpace the National Statistical Office’s (NSO) first advance estimate, reflecting "buoyant high‑frequency data since September 2025 led by policy impetus," a new report has said. The report from Morgan Stanley estimated real GDP growth at 7.6 per cent year‑on‑year for FY26 -- above the NSO’s first advance estimate, which pegged real GDP growth at 7.4 per cent YoY.
The consensus estimate for FY26 growth is at 7.5 per cent, and the Reserve Bank of India’s estimate is 7.3 per cent, the report said. The combined impetus from fiscal and monetary policy support, improved purchasing power, and labour market outlook is likely to ensure that consumption recovery gains more breadth.
|
500% tariff on India? US President Donald Trump has purportedly backed a Bill that threatens to raise tariffs on countries buying energy products, including oil, from Russia to at least 500 per cent. If approved, the Bill will add pressure on countries like India, China, and Brazil, which continue to purchase Russian oil despite US sanctions. According to US Senator Lindsey Graham, the US President has approved a bipartisan Bill titled the 'Sanctioning of Russia Act 2025'. Although the Bill has not yet been passed, Graham said it could be brought up for a bipartisan vote as early as next week. In a post on X, Graham said he met Trump at the White House this week, where the President gave his approval to the Bill that he had been working on for months. According to the US Congress website, the legislation, titled the “Sanctioning of Russia Act 2025”, proposes wide-ranging penalties on individuals and entities connected to Russia. One major provision includes increasing duties on all goods and services imported from Russia into the US to at least 500 per cent of their value. |
