Forbes India

How India's FY26 GDP estimates beat expectations

India's economy hit its highest growth in three years, with FY26 Gross Domestic Product (GDP) expanding 7.7 percent and Gross Value Added (GVA) at 7.9 percent, surpassing both FY24 and FY25, highlighting the economy's strengthening momentum heading into an uncertain FY27 due to the lingering effects of the war in West Asia, oil price uncertainty and a weak monsoon forecast. After a relatively modest 6.8 percent start, India's GDP growth surged to 8.3 percent in Q2 FY26 before settling at 7.8 percent in Q4, pointing to a sustained expansion across the full financial year. Private consumption and capital formation both hit a three year high in FY26 at 7.7 percent and 8.2 percent respectively, signalling a more balanced growth story even as government spending eased slightly from the previous year. Gross fixed capital formation (or investment) maintained its share at roughly 32 percent of GDP for the third straight year, while the import share declined to 23.7 percent. Trade, hotels and transport led all sectors with 11 percent growth in FY26, while manufacturing followed closely at 10.7 percent, together driving India's broad-based expansion, even as agriculture and utilities lost significant ground year-on-year.

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