India’s FY26 GDP Growth Zooms To 7.7%, Defies Global Headwinds
“We have no reason to second-guess them (RBI forecast) at this point, because there are both possibilities on the upside and on the downside with respect to the numbers that they have presented": Chief economic adviser (CEA) V Anantha Nageswaran
New Delhi: Despite witnessing the ongoing global uncertainty, geopolitical tensions and elevated energy prices, India’s economy accelerated in the whole fiscal year 2025-26 (ie; FY26). Hailing the robust economic growth in the country, the government is hopeful that the Centre’s macro stability and supply measures can bring back India on a 7 per cent growth trajectory in the next fiscal also.
As per the government, the growth of real gross domestic product (GDP) grew to 7.7 per cent, up from 7.1 per cent projected in the second advance estimates, while the GDP showed a better-than-expected growth of 7.8 per cent in the fourth quarter of last financial year 2025-26, marginally down from 8 percent in Q3FY26. Reacting to the GDP data, chief economic adviser (CEA) V Anantha Nageswaran said that the growth is contingent on improvement in external conditions.
“India’s stronger-than-expected FY26 growth performance has provided a cushion against mounting global uncertainties, but policymakers remain wary of fresh challenges emerging from higher oil prices, monsoon risks and the ongoing crisis in West Asia. It is a hope based on the assumption that the pre-February 28 conditions are restored before FY28. Now, if these conditions continue, then we will revisit the estimate for the next financial year,” Nageswaran said.
“We have no reason to second-guess them (RBI forecast) at this point, because there are both possibilities on the upside and on the downside with respect to the numbers that they have presented. So, even if the growth were to slip below 7 per cent as the RBI forecast suggests, macro stability measures and supply assurances will bring us back to a 7 per cent plus growth track in FY28 or as soon as external conditions improve,” he said.
In a statement, the ministry of statistics & programme implementation (MoSPI) said that real GDP or GDP at constant prices is estimated to attain a level of Rs 323.12 lakh crore in the 2025-26, against the first revised estimate (FRE) of GDP for 2024-25 of Rs 299.89 lakh crore, showing the growth rate in real GDP during 2025-26 is estimated at 7.7 per cent as compared to 7.1 per cent in 2024-25. “However, nominal GDP, or GDP at current prices, has been estimated to attain a level of Rs 346.36 lakh crore in 2025-26, against Rs 318.07 lakh crore in 2024-25, showing a growth rate of 8.9 per cent,” the statement said.
Meanwhile, the central bank on Friday lowered its GDP forecast for FY27 to 6.6 per cent from the 6.9 per cent estimated in April, citing elevated energy and other commodity prices, as well as continued supply disruptions arising from the conflict in West Asia, which are likely to weigh on economic activity.
Talking about nominal GDP, the CEA said, it is a fair estimate that it will overshoot the 10.1 per cent estimated in the Budget 2027, given the upward momentum of retail inflation. “The good news is that the nominal GDP growth will be significantly higher than the number which the budget estimates used, which is 10.1 percent for the current financial year,” he added.