The central government has projected India’s GDP growth rate at 7.4% for FY26, highlighting the economy’s resilience amid Trump-era tariffs and the absence of a formal India-US trade deal. This projection slightly surpasses the Reserve Bank of India’s estimate of 7.3% and improves on last year’s growth of 7.3%, though it remains below FY24’s 9.2% expansion.
The first advance GDP estimates released by the Ministry of Statistics and Programme Implementation (MOSPI) show India’s economy continuing to perform strongly, with nominal GDP expected to grow by 8% in FY26 compared to 9.7% in FY25. The real gross value added (GVA) is projected to expand at 7.3%, up from 6.4% last year, while nominal GVA is expected at 7.7%, down from 9.3% in FY25.
According to MOSPI:
- Private consumption, contributing about 60% of GDP, is expected to grow 7% year-on-year, slightly below FY25’s 7.2%.
- Government spending is set to rise 5.2%, up from 2.3% last fiscal.
- Private investment is projected to increase 7.8%, higher than the 7.1% growth last year.
- Manufacturing, which makes up roughly 13% of GDP, is forecast to expand 7% compared to 4.5% a year ago.
- Agriculture, employing over 40% of the workforce, is expected to grow 3.1%, down from 4.6% previously.
- Construction activity is estimated to grow 7% in FY26, falling from 9.4% last year.
India’s GDP momentum has already shown a six-quarter high growth of 8.2% in Q2 FY26, supported by consumption and manufacturing activity. Economists note that the government may revise GDP calculations in the Union Budget 2026, which could materially alter growth estimates.