New Delhi: India’s real GDP growth rate is projected at 7.4 per cent in FY 2025–26, up from 6.5 per cent in FY 2024–25, according to the advanced estimates released on Wednesday by the Ministry of Statistics and Programme Implementation. The estimates underline India’s continued economic resilience, supported by robust domestic demand and sectoral momentum.
The data indicates that the services sector will remain the primary engine of growth, with financial services, real estate, professional services and public administration together expected to expand by 9.9 per cent at constant prices in FY 2025–26.
Trade, hotels, transport, communication and services related to broadcasting are projected to grow by 7.5 per cent, reflecting sustained recovery in mobility, tourism and consumer-facing services.
India GDP Growth FY26 Driven by Strong Services Momentum
Growth in the secondary sector is also expected to remain stable. Manufacturing and construction are projected to grow at 7 per cent, supported by infrastructure spending and steady industrial activity. The agriculture sector is estimated to record a growth rate of 3.1 per cent, reflecting normal output conditions.
On the demand side, Real Private Final Consumption Expenditure (PFCE) is projected to grow by 7 per cent during FY 2025–26. This is expected to be driven by higher disposable incomes, income tax exemptions announced in the Union Budget, and subsequent GST rate reductions across several goods and services.
Investment activity is also set to strengthen. Gross Fixed Capital Formation (GFCF), a key indicator of capital expenditure, is estimated to rise by 7.8 per cent at constant prices in FY 2025–26, compared with 7.1 per cent in the previous financial year.
Q2 Performance Lifts Overall Growth Trajectory
India’s growth momentum strengthened significantly in the current financial year, with real GDP expanding by 8.2 per cent in the second quarter (July–September), up sharply from 5.6 per cent in the corresponding quarter of FY 2024–25, according to data released in November.
The strong performance was driven by the secondary and tertiary sectors, which grew by 8.1 per cent and 9.2 per cent, respectively. Manufacturing recorded a robust growth of 9.1 per cent, while construction expanded by 7.2 per cent during the quarter.
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Within services, financial, real estate and professional services posted double-digit growth of 10.2 per cent. Agriculture and allied activities grew by 3.5 per cent, while electricity, gas, water supply and other utility services expanded by 4.4 per cent.
India GDP Growth FY26 Supported by Consumption and Investment
Consumption demand showed notable improvement, with real PFCE rising by 7.9 per cent in Q2 of FY 2025–26, compared with 6.4 per cent in the same period last year. The rise reflects higher incomes, improving employment conditions and stronger household spending.
The economy had already posted a solid 7.8 per cent growth in the first quarter (April–June), taking real GDP growth for the first half (H1) of FY 2025–26 to 8 per cent, compared with 6.1 per cent in H1 of FY 2024–25.
Despite external pressures, including tariff hikes by the United States and broader global trade uncertainty, India continues to stand out as the world’s fastest-growing major economy.
Global Outlook Still Favourable for India
The International Monetary Fund has projected India to be the only major economy expected to grow above 6 per cent in FY 2025–26, even as global growth moderates and trade disruptions persist.
Economists say the advanced estimates reinforce India’s position as a key driver of global growth, supported by domestic consumption, public investment and a resilient services sector.
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