India's GDP Estimated To Grow 7.4% In FY2025-26 Despite Global Challenges: Govt's First Advance Estimates

India’s real gross domestic product (GDP) is estimated to grow at 7.4% in FY 2025-26 despite global challenges amid tariff war, which is higher than the 6.5% expansion recorded a year ago, according to the government’s

First Advance Estimates released on January 7.

According to a statement by the Ministry of Statistics & Programme Implementation (MoSPI), GDP at constant prices (2011-12 base) is projected to reach Rs 201.90 lakh crore in FY26, compared with the provisional estimate of Rs 187.97 lakh crore in FY25, registering a growth rate of 7.4%.

Key domestic reforms are poised to act as economic catalysts, including a strategic income tax cut in the FY26 budget, GST rationalisation, and three pivotal foreign trade agreements with Oman, the UK, and New Zealand.

Nominal GDP or GDP at Current Prices is estimated to attain a level of Rs 357.14 lakh crore in the FY 2025-26, against Rs 330.68 lakh crore in FY 2024-25, showing a growth rate of 8.0%, the MoSPI said.

According to the ministry, manufacturing and construction are estimated to achieve a growth rate of 7 per cent.

“Buoyant growth in the services sector has been found to be a major driver in the estimated real GVA (gross value added) growth rate of 7.3 per cent in FY 2025-26,” MoSPI said.

However, agriculture and allied sector and ‘electricity, gas, water supply and other utility services’ sectors are estimated to witness moderate growth rate in the current fiscal ending March 31.

The advance estimates data is used in preparation of the Union Budget, likely to be presented on February 1.

India’s economy grew 6.5 per cent in FY25 and 8.2 per cent in FY24, according to the data.