The economy expanded 7.8% in the January-March quarter of FY26 over 8% in the previous quarter.
India is now reporting in the new gross domestic product (GDP) series, following the recent revision of the inflation basket, adopting 2022–23 as the new base year and introducing updated back-series data as part of a broader effort to better capture post-pandemic consumption shifts and the rapid expansion of the digital economy.
This is the second print under revised national account data that updated the base year and widened sources.
The fourth quarter figure beat the median estimate of 7.3% in a Bloomberg survey of economists and matched the pace recorded in the previous quarter.
Also Read: RBI GDP growth 2026-27: Forecast cut to 6.6% as oil, war and subpar monsoon risks mount
The strong growth print comes against an increasingly uncertain global backdrop. Higher U.S. tariffs, geopolitical tensions linked to the Iran conflict and rising energy prices have emerged as key risks to the outlook. India remains particularly vulnerable because of its dependence on imported crude oil and trade flows through the Strait of Hormuz.Concerns over elevated inflation, tighter financial conditions and possible weather-related disruptions are also clouding the outlook for both urban and rural demand.
Before tensions in the Middle East escalated, Chief Economic Adviser V Anantha Nageswaran had projected India’s economy to grow between 7% and 7.4% in the current financial year. That outlook is now facing fresh uncertainty as the Iran conflict enters its fourth month with no clear signs of a diplomatic breakthrough between Washington and Tehran.
India, the world’s third-largest crude importer, is among the economies most exposed to disruptions in global oil supplies, with any sustained rise in crude prices likely to weigh on inflation, the trade balance and overall economic growth.
DK Srivastava, Chief Policy Advisor, EY India, said: “NSO’s provisional estimates for 2025-26 show an impressive real GVA and GDP growth at 7.9% and 7.7% respectively. On the output side, the main contributors to growth are manufacturing at 10.7%, and the two important services sectors namely trade, transport et. al at 11.0% and financial real estate et. al at 10.4%. On the demand side private final consumption expenditure shows a health growth at 7.7% and investment growth as captured by gross fixed capital formation at 8.2% are the main contributors. Net-exports have remained negative although in terms of magnitude, the excess of imports over exports has fallen in 2025-26. The contribution of net exports to overall growth is near zero implying that domestic growth drivers are key to India’s growth story.”
He added: “Going forward, however, due to the oil sector pressures, growth in manufacturing and trade, transport et. al sectors may be affected relatively more than other sectors. The RBI, in its June 2026 monetary policy review, has assessed India’s GDP growth to be 6.6% for 2026-27, implying a fall of 1.1 percentage points as compared to 2025-26. India’s growth performance in 2026-27 will depend largely on a speedy normalization of global crude supply and prices.”
Inflation-adjusted GDP rose in the fourth quarter to Rs 87.77 lakh crore from Rs 81.40 lakh crore a year earlier. In nominal terms, which includes the impact of prices, GDP expanded 9.1% to Rs 94.65 lakh crore.
Gross value added (GVA), a measure of economic activity across sectors, rose 7.9% in real terms during the quarter to Rs 80.18 lakh crore from Rs 74.32 lakh crore a year ago. Nominal GVA grew 9.9% to Rs 86.46 lakh crore.
“The 4Q GDP came in higher than expected given the robust private consumption and investment. Going ahead, however, we remain wary on the headwinds from the geopolitical and ElNino led supply side shocks. Tightening financial conditions, higher inflation and weak monsoons could weigh across urban and rural demand. We expect GDP to hover in the 6-6.3% range, depending on how these risks play out,” said Upasna Bharadwaj, chief economist, kotak Mahindra Bank.
Furthermore, for the full-year, inflation-adjusted GDP rising to Rs 323.12 lakh crore from Rs 299.89 lakh crore in FY25. The growth rate marks an improvement from 7.1% recorded in the previous financial year.
In nominal terms, which includes the impact of inflation, GDP is estimated to have expanded 8.9% to Rs 346.36 lakh crore in FY26 from Rs 318.07 lakh crore a year earlier.
Earlier in the day, the Reserve Bank of India (RBI) reduced its growth forecast for FY27 to 6.6% from 6.9% in its policy announcement, citing rising global uncertainties linked to the ongoing conflict in West Asia.
The central bank now expects GDP growth of 6.6% in the first quarter, 6.3% in the second quarter, 6.5% in the third quarter and 6.8% in the fourth quarter of FY27.