NEW DELHI: The Indian economy is expected to grow by 7.4 per cent in the current fiscal, maintaining its status as the world’s fastest-growing major economy despite punitive US tariffs and geopolitical tensions.
The First Advance Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) on Wednesday put GDP growth in 2025-26 (April 2025 to March 2026 fiscal year) at better than 7.3 per cent forecast by the RBI and the government’s initial projection of 6.3-6.8 per cent.
The economy had grown at 6.5 per cent in the previous fiscal. The better-than-expected showing comes on the back of resilience shown by the economy despite the United States imposing punitive tariffs of 50 per cent on Indian goods, escalating trade tensions and threatening to disrupt key export sectors.
The Modi government has responded by overhauling GST, which lowered taxes on hundreds of items, and implementing long-delayed labour reforms. These, together with the lower income tax burden, cut in interest rates, low inflation and strong rural demand, have kept the momentum in the economy.
Last month, the International Monetary Fund projected India’s real GDP growth at 6.6 per cent in fiscal 2026, easing to 6.2 per cent in fiscal 2027, based on the assumption of a prolonged delay in a US-India trade agreement.
The Gross Domestic Product (GDP) had expanded by 9.2 per cent during 2023-24.
The First Advance Estimates of national income, released by the government on Wednesday, also showed that Gross Value Added (GVA) is estimated to grow at 7.3 per cent during the current financial year as against 6.4 per cent in the year-ago period.
The manufacturing sector is expected to post a 7 per cent growth (GVA) in the current fiscal, up from 4.5 per cent in 2024-25. The growth in the services sector has been estimated at 9.1 per cent versus 7.2 per cent in 202425, according to data released by the National Statistics Office (NSO), MoSPI.
Growth in the agriculture and allied sector moderated to 3.1 per cent in the current fiscal from 4.6 per cent in 2024-25.
“Real GDP or GDP at constant prices is estimated to attain a level of Rs 201.90 lakh crore in FY 2025-26, against the provisional estimates (PE) of GDP for FY 2024-25 of Rs 187.97 lakh crore, registering a growth rate of 7.4 per cent,” NSO said.
The nominal GDP, which factors in inflation, is estimated to attain a level of Rs 357.14 lakh crore in 2025-26 against Rs 330.68 lakh crore in 2024-25, showing a growth rate of 8 per cent. The government had estimated the nominal GDP expansion at 10.1 per cent in the Union Budget presented in February last year.
The First Advance Estimates are used in preparation of the Union Budget, likely to be presented on February 1.
In US dollar terms, the GDP is likely to be $3.97 trillion ($1 = Rs 90).