India forecasts 7.4% economic growth in 2025/26 fiscal year

India’s economy is expected to grow 7.4 per cent in the fiscal year ending in March 2026, according to data released on Wednesday by the National Statistics Office, exceeding the government’s earlier projection of 6.3 per cent to 6.8 per cent.

The first advance estimate of gross domestic product (GDP), which will be revised over time as data coverage improves, will serve as the base for the federal budget scheduled to be presented on February 1.

India’s economy expanded 6.5 per cent in 2024/25, following growth of 8.2 per cent in 2023/24.

In nominal terms, which account for inflation, economic growth is projected at 8 per cent, lower than the 10.1 per cent estimate outlined in the annual federal budget announced last February.

Private consumption, which contributes around 60 per cent of GDP, is expected to grow 7 per cent year-on-year, compared with a 7.2 per cent expansion in the previous fiscal year.

Government spending is estimated to increase 5.2 per cent year-on-year in 2025/26, up from a 2.3 per cent rise a year earlier. Private investment is forecast to grow 7.8 per cent, compared with 7.1 per cent in the previous year.

Manufacturing, which accounts for about 13 per cent of GDP, is projected to expand 7 per cent year-on-year in 2025/26, compared with 4.5 per cent a year ago. Construction output is seen growing 7 per cent, down from 9.4 per cent in the previous year, the data showed.

Growth in farm output, which employs more than 40 per cent of the workforce, is expected to rise to 3.1 per cent in the current fiscal year from 4.6 per cent a year earlier.