India’s economy grew 7.8 percent in the fourth quarter (January-March) of fiscal year 2025-26, the National Statistical Office (NSO) under the Ministry of Statistics and Program Implementation (MoSPI) reported on Friday, 5 June 2026. For the full fiscal year 2025-26, real GDP growth stood at 7.7 percent, up from 7.1 percent in the previous year. Robust private investment, construction, and services activity drove the performance, even as early effects of West Asia tensions emerged.
India’s economy: Strong quarterly performance beats forecasts
The January-March quarter growth of 7.8 percent exceeded economists’ expectations of around 7.3 percent, according to the provisional estimates. Real GDP at constant 2022-23 prices for Q4 reached ₹87.77 lakh crore, compared with ₹81.40 lakh crore in the corresponding quarter of the previous year. Nominal GDP for the quarter stood at ₹94.65 lakh crore, reflecting 9.1 percent growth.
Key sectors contributed significantly. Trade, hotels, transport, communication, and broadcasting services expanded by 12.5 percent, while financial, real estate, and professional services grew 10.4 percent. Manufacturing rose 7.3 percent and construction 8.4 percent.
Gross value added (GVA) in Q4 grew 7.9 percent at constant prices. On the expenditure side, gross fixed capital formation (investment) showed strong momentum.
Full-year growth revised higher
For the entire fiscal year 2025-26, real GDP reached ₹323.12 lakh crore, registering 7.7 percent growth compared with the first revised estimate for 2024-25. Nominal GDP stood at ₹346.36 lakh crore, up 8.9 percent. Real GVA grew 7.9 percent.
This performance positions India as one of the fastest-growing major economies, supported by domestic demand, reforms, and policy measures. Primary sector indicators, including food grain production, showed positive trends, with cereals up notably.
Prime Minister Narendra Modi welcomed the data, posting on X: “India’s growth momentum remains strong! GDP growth rate of 7.7% in FY 2025-26 and 7.8% in Q4 of FY 2025-26 reflect the inherent strength of our economy, the success of reforms and the hard work of 140 crore Indians. We shall leave no stone unturned to further ‘Ease of Living,’ ‘Ease of Doing Business’ and increase opportunities for our youth.”
Sectoral and expenditure drivers
Secondary and tertiary sectors were key contributors to both quarterly and annual GVA growth. Investment indicators such as steel consumption, commercial vehicle sales, and infrastructure-related activity remained supportive.
The data reflects a revised base year series (2022-23), providing wider coverage and updated methodology, which MoSPI implemented earlier in 2026.
Background
The provisional estimates incorporate data up to Q4, revising earlier advance estimates. They come against a backdrop of global uncertainties, including the West Asia conflict, which had limited impact on Q4 output but raised concerns for the future. High-frequency indicators for rural and urban demand showed resilience in the quarter.
What’s next
Economists anticipate moderation in growth for fiscal year 2026-27 due to elevated energy prices, potential supply disruptions, and monsoon uncertainties. The Reserve Bank of India has adjusted its forecast accordingly, though domestic demand and policy support are expected to provide a buffer. Sustaining momentum will require continued focus on private investment, productivity, and consumption recovery.
India’s economy continues to demonstrate underlying strength, with the latest GDP figures highlighting its capacity to navigate external challenges while maintaining robust expansion.
Published in SouthAsianDesk, June 6, 2026
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