India’s economy to grow 7.4% in FY26, up from 6.5% last year: Govt

India’s economy is estimated to grow at 7.4% in real terms in 2025-26, faster than the 6.5% growth recorded in 2024-25, according to the first advance estimates released on Wednesday, January 7.

The estimates, released by the National Statistics Office under the Ministry of Statistics and Programme Implementation, projected real gross value added (GVA) rising 7.3% during the current fiscal.

Real GDP at constant (2011-12) prices is estimated at ₹201.90 lakh crore in 2025-26, compared with the provisional estimate of ₹187.97 lakh crore in 2024-25.

Nominal GDP is pegged at ₹357.14 lakh crore, up from ₹330.68 lakh crore in the previous fiscal.

"Buoyant growth in services sector has been found to be a major driver," the release said.

Manufacturing and construction activity is estimated to grow 7.0%, while agriculture and allied activities are projected to post a more modest 3.1% increase.

Electricity, gas, water supply and other utility services are expected to grow 2.1%.

The Reserve Bank of India (RBI) recently revised its GDP growth projection for 2025-26 to 7.3% from an earlier 6.8%.

The Indian economy grew by 7.8% in the April-June quarter and 8.2% in the July–September quarter.

The central bank sees Q3 GDP growth at 7% and Q4 at 6.5%.

Prime Minister Narendra Modi has pushed tax cuts and labour reforms in recent months to boost domestic manufacturing and investment, while resisting pressure from the United States to sign a trade deal that would require lowering tariffs across sensitive sectors such as agriculture.

International agencies also expect India to retain its position as one of the world’s fastest-growing major economies.