India's economy to grow 7.4% in FY26, first advance estimates show

The projection formed part of India's first advance estimate of gross domestic product (GDP), which is subject to revisions as data coverage improves

India’s economy is expected to grow 7.4 per cent in the financial year ending March 2026, according to the first advance estimates released by the National Statistics Office (NSO) on Wednesday, exceeding the government’s earlier projection of 6.3–6.8 per cent.

 

  The estimates, issued by the Ministry of Statistics and Programme Implementation, place real GDP growth higher than the 6.5 per cent recorded in FY 2024–25, while nominal GDP growth is pegged at 8.0 per cent for the current financial year.

Services sector remains key growth driver

The services remains the key driver of expansion in FY26, with the estimated Real Gross Value Added (GVA) growth rate of 7.3 per cent in FY26.

 

 

Within the tertiary sector, financial, real estate and professional services, along with public administration, defence and other services, are estimated to grow by 9.9 per cent at constant prices. Trade, hotels, transport, communication and services related to broadcasting are projected to expand 7.5 per cent.

Manufacturing and construction show steady expansion

The secondary sector is also expected to maintain momentum, with manufacturing and construction together estimated to grow 7.0 per cent in FY26 at constant prices.

 

In contrast, growth in the agriculture and allied sector is projected at a moderate 3.1 per cent, while electricity, gas, water supply and other utility services are estimated to witness relatively slower movement in primary and utility-linked activities.

Consumption and investment outlook

On the demand side, household spending and capital formation are expected to support overall demand. Real Private Final Consumption Expenditure (PFCE) has been estimated to attain a growth rate of 7 per cent during FY26.

 

Investment activity is also projected to improve. Gross Fixed Capital Formation (GFCF) has been estimated to have 7.8 per cent growth rate at Constant Prices during FY26, compared with 7.1 per cent growth in the previous year.

GDP, GVA levels rise sharply

At constant prices, Real GDP is estimated at ₹201.9 trillion in FY26, up from ₹187.97 trillion in FY25. Nominal GDP is placed at ₹357.14 trillion, compared to ₹330.68 trillion a year earlier.

 

Real GVA is estimated at ₹184.5 trillion, while nominal GVA is projected at ₹323.48 trillion, reflecting growth of 7.3 per cent and 7.7 per cent, respectively.