India registers 7.7% GDP growth in FY26 despite geopolitical shocks and weak global outlook

GDP Growth Data: India's economy grew at a faster pace than previously estimated in FY26, with official data released on Friday showing real GDP growth of 7.7 per cent, supported by strong domestic demand, resilient services activity and sustained momentum in manufacturing and construction.

The provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) also showed that the economy expanded 7.8 per cent in the January-March quarter, ending the financial year on a strong note despite geopolitical tensions, volatile commodity prices and a challenging global backdrop.

The latest figure marks an improvement over the 7.1 per cent growth recorded in FY25 and is higher than the government's Second Advance Estimate released earlier this year.

FY26 growth revised higher

According to the provisional estimates, India's real GDP at constant 2022-23 prices stood at Rs 323.12 lakh crore in FY26, up from Rs 299.89 lakh crore a year earlier.

Nominal GDP, which captures both economic growth and inflation, rose 8.9 per cent to Rs 346.36 lakh crore.

The upward revision comes after the government incorporated actual economic data for all four quarters of FY26. The earlier estimates released in February were based on information available only up to the December quarter.

The latest numbers suggest economic activity remained stronger than initially anticipated during the closing months of the financial year.

GVA growth reflects broad-based expansion

Gross Value Added (GVA), considered a key gauge of underlying economic activity, grew 7.9 per cent during FY26 compared with 7.3 per cent in the previous year.

At current prices, GVA increased 9.1 per cent to Rs 314.87 lakh crore.

The data pointed to broad-based growth across sectors, with services continuing to drive the economy while manufacturing, construction and other industrial segments also posting healthy expansion.

Government statisticians said the estimates were compiled using a wide range of indicators, including GST collections, industrial production, corporate financial results, vehicle sales, freight traffic, banking activity, telecom usage, trade figures and tax collections.

Economy ends FY26 on a strong footing

The January-March quarter remained one of the strongest periods of the year.

Real GDP during the quarter rose to Rs 87.77 lakh crore from Rs 81.40 lakh crore in the corresponding period last year, translating into growth of 7.8 per cent.

Nominal GDP increased 9.1 per cent to Rs 94.65 lakh crore.

Meanwhile, real GVA expanded 7.9 per cent during the quarter, while nominal GVA grew 9.9 per cent.

The robust fourth-quarter performance indicates that consumer demand and investment activity remained supportive even as global economic conditions remained uncertain.

New GDP series in effect

The FY26 provisional estimates are part of the revised national accounts series that uses 2022-23 as the base year.

The updated series was introduced earlier this year to better reflect structural changes in the economy and incorporate more recent data sources.

MoSPI said the estimates include updated information received for the fourth quarter as well as revisions to earlier quarterly data.

The ministry also said future GDP releases will be aligned with the revised 2022-23 base-year series for the Index of Industrial Production (IIP) and Wholesale Price Index (WPI).

Among world's fastest-growing major economies

The latest data reinforces India's position among the fastest-growing major economies at a time when several advanced economies continue to grapple with slowing growth.

The stronger-than-expected FY26 performance is likely to provide comfort to policymakers, particularly amid concerns around global trade disruptions, geopolitical risks and fluctuations in energy prices.

Attention will now turn to FY27, with investors and economists closely watching whether the economy can sustain its growth momentum. The first GDP reading for the current financial year, covering the April-June quarter, is scheduled to be released on August 31.

Government monitoring West Asia-linked risks

Reacting to the latest GDP data, Chief Economic Adviser V. Anantha Nageswaran said the government is closely monitoring developments in West Asia and their potential impact on the Indian economy.

He said the latest growth figures present a balanced picture of the economy, but cautioned that estimating the trajectory of growth and inflation has become more challenging given evolving global conditions.

According to Nageswaran, the ongoing conflict in West Asia is affecting both demand and supply dynamics globally, while elevated crude oil prices remain a key risk factor for economic growth.

Higher energy costs could have implications for inflation, household spending and business investment if geopolitical tensions persist, he indicated.