India’s Real GDP Growth Likely To Accelerate To 7.4% In FY26: Advance Estimates

New Delhi, Jan 8 (KNN) India’s real GDP growth is expected to rise sharply to 7.4 percent in the current fiscal 2025-26, according to the government’s first advance estimate.
 
Data in the Advance Estimates
 
The growth is aided by a strong rebound in manufacturing sector which is seen accelerating  to 7 percent from 4.5 percent last year, despite disruptions caused by 50 percent US tariffs on Indian goods.
 
Data released on Wednesday by the Ministry of Statistics and Programme Implementation (MoSPI) showed that while real GDP growth is projected to rise from 6.5 percent in 2024–25, nominal GDP growth, which does not adjust for inflation, is set to fall to a five-year low of 8 percent.
 
In rupee terms, nominal GDP for 2025–26 is estimated at Rs 357 lakh crore. At an exchange rate of Rs 89.89 per US dollar, this translates to a GDP size of nearly USD 4 trillion. 
 
Upcoming Data Releases and Revisions
 
On February 27, the MoSPI will release GDP data for the October–December 2025 quarter under the new series, along with the second advance estimate for 2025–26 and revised GDP numbers for the previous three years. 
 
Under the current series, GDP growth was recorded at 7.6 percent in 2022–23, 9.2 percent in 2023–24 and 6.5 percent in 2024–25. The final GDP growth figure for 2025–26 will be available only in February 2028.
 
Sectoral Performance: Manufacturing Up, Agriculture Slows
 
On the sectoral front, manufacturing growth is projected to rebound strongly in the current fiscal, reflecting improved industrial activity despite global trade headwinds. 
 
Agricultural growth is expected to moderate to 3.1 percent, down from 4.6 percent in 2024–25, indicating a cooling in farm output. The construction sector is forecast to expand by 7 percent, slower than the 9.4 percent growth recorded last year but still pointing to sustained infrastructure and real estate activity. 
 
Overall, gross value added (GVA) growth is seen rising to 7.3 percent from 6.4 percent in the previous fiscal, supported largely by manufacturing and services.
 
Demand-Side Trends Remain Stable
 
On the expenditure side, growth in private consumption expenditure is expected to remain broadly stable at 7 percent in 2025–26, compared to 7.2 percent a year earlier, suggesting steady household demand. 
 
Investment activity is projected to pick up momentum, with growth estimated at 7.8 percent, higher than the 7.1 percent recorded in the previous fiscal, reflecting continued public and private sector capital spending.
 
(KNN Bureau)