India’s Growth Story Accelerates: FY26 Emerges as a New High Point for the Economy

India’s economic momentum continues to hold firm despite global uncertainty. According to the First Advance Estimates released by the Ministry of Statistics & Programme Implementation, India’s real Gross Domestic Product (GDP) is projected to grow at 7.4% in FY 2025–26, marking the highest growth rate in the past two years. This represents a notable improvement over the 6.5% growth recorded in FY 2024–25, underlining the economy’s strengthening trajectory.

The estimates come at a time when several major economies are facing slowdown due to trade frictions, geopolitical pressures, and tightening financial conditions. Against this backdrop, India’s performance highlights the relative resilience of its economic fundamentals and the increasing role of domestic drivers in sustaining growth.

Services Sector Remains the Key Engine

A major contributor to the improved outlook is the strong performance of the services sector, which continues to anchor India’s economic expansion. According to the First Advance Estimates, real Gross Value Added (GVA) is expected to grow by 7.3% in FY26, driven largely by buoyant activity in services such as information technology, finance, trade, transport, and communications. The sustained strength in services has helped offset global headwinds and supported overall economic stability.

Nominal GDP Reflects Steady Expansion

Alongside real growth, nominal GDP—accounting for inflation—is projected to rise by 8.0% in FY 2025–26. The steady nominal expansion indicates a balanced growth environment, combining healthy output gains with manageable price pressures. This trend also strengthens fiscal capacity and supports continued public and private investment.

Growth Picks Up Despite Global Challenges

The acceleration in GDP growth to 7.4% comes despite ongoing external challenges, including trade-related uncertainties and a subdued global outlook. Policymakers view the improvement as evidence that India’s economy is increasingly insulated from external volatility, supported by strong domestic consumption, public infrastructure spending, and reform-led efficiency gains. With the First Advance Estimates pointing to a faster pace of expansion in FY26, India retains its position among the fastest-growing major economies, even as growth moderates across much of the world.