India’s economy surges to fastest growth in three years: Factories, services lead GDP spurt
MoSPI provisional estimates put real GDP growth at 7.7%, nominal GDP growth ay 8.9% for FY2026
India's economy achieved its fastest growth in three years during fiscal year 2025–26, with real GDP expanding by a robust 7.7 percent, surpassing the previous year's 7.1 percent and marking the strongest performance since FY 2022–23, driven primarily by substantial growth in the secondary and tertiary sectors, which saw expansions of 8.8 percent and 9.3 percent respectively, with manufacturing alone growing by 10.7 percent and services like financial, real estate, IT, and trade experiencing double-digit increases; this economic surge was further bolstered by an 8.2 percent rise in Gross Fixed Capital Formation, indicating sustained business and government confidence, and a 7.7 percent increase in private consumption, while the final quarter (January-March 2026) showed particularly strong momentum with 7.8 percent real GDP growth and an 10.8 percent surge in GFCF, contributing to a 6.8 percent rise in per capita GDP to ₹2,27,447 at constant prices.
India's economy achieved its fastest growth in three years during fiscal year 2025–26, with real GDP expanding by a robust 7.7 percent, surpassing the previous year's 7.1 percent and marking the strongest performance since FY 2022–23, driven primarily by substantial growth in the secondary and tertiary sectors, which saw expansions of 8.8 percent and 9.3 percent respectively, with manufacturing alone growing by 10.7 percent and services like financial, real estate, IT, and trade experiencing double-digit increases; this economic surge was further bolstered by an 8.2 percent rise in Gross Fixed Capital Formation, indicating sustained business and government confidence, and a 7.7 percent increase in private consumption, while the final quarter (January-March 2026) showed particularly strong momentum with 7.8 percent real GDP growth and an 10.8 percent surge in GFCF, contributing to a 6.8 percent rise in per capita GDP to ₹2,27,447 at constant prices.
India's economy achieved its fastest growth in three years during fiscal year 2025–26, with real GDP expanding by a robust 7.7 percent, surpassing the previous year's 7.1 percent and marking the strongest performance since FY 2022–23, driven primarily by substantial growth in the secondary and tertiary sectors, which saw expansions of 8.8 percent and 9.3 percent respectively, with manufacturing alone growing by 10.7 percent and services like financial, real estate, IT, and trade experiencing double-digit increases; this economic surge was further bolstered by an 8.2 percent rise in Gross Fixed Capital Formation, indicating sustained business and government confidence, and a 7.7 percent increase in private consumption, while the final quarter (January-March 2026) showed particularly strong momentum with 7.8 percent real GDP growth and an 10.8 percent surge in GFCF, contributing to a 6.8 percent rise in per capita GDP to ₹2,27,447 at constant prices.
India's economy grew at its fastest pace in three years in FY 2025–26, data from the Ministry of Statistics and Programme Implementation (MoSPI) revealed. The Centre's provisional estimates show real GDP expanding by 7.7 per cent, up from 7.1 per cent in FY 2024–25—the best performance since FY 2022–23. In absolute terms, the economy is now valued at ₹323.12 lakh crore at constant prices, against ₹299.89 lakh crore in the previous year. Nominal GDP, which reflects current market prices, came in at ₹346.36 lakh crore, growing 8.9 per cent.
The growth was powered by secondary and tertiary sectors, which grew 8.8 per cent and 9.3 per cent respectively at constant prices. Manufacturing alone expanded 10.7 per cent for the full year. Financial Services, Real Estate, IT, and Professional Services grew 10.4 per cent, while Trade, Hotels, Transport, and Communication surged 11 per cent—both sectors recording double-digit growth at both constant and current prices. The primary sector—agriculture and mining—grew at a more modest 3.2 per cent.
On the investment side, Gross Fixed Capital Formation (GFCF), the measure of how much businesses and governments are ploughing back into productive assets (buildings, machines, and infrastructure) grew 8.2 per cent, a strong signal that confidence in the economy's future is intact. Private consumption, which accounts for about 55.7 per cent of GDP, also expanded 7.7 per cent.
The final quarter of the year, January to March 2026, came in especially strong: real GDP grew 7.8 per cent in Q4, faster than the 7.0 per cent recorded in Q4 of FY 2024–25. GFCF in the quarter surged 10.8 per cent, suggesting an investment-led push in the last stretch of the fiscal year. India's per capita GDP at constant prices rose to ₹2,27,447 in FY26, up 6.8 per cent from the previous year.