India’s economy is estimated to have grown 7.2% year-on-year in the January-March 2026 quarter (Q4FY26), according to a Financial Express poll of economists. The reading marks a slowdown from the 7.8% expansion recorded in the preceding October-December quarter, largely reflecting the initial impact of the West Asia crisis.
The poll of 12 economists pegs full-year FY26 GDP growth at 7.55%, marginally below the National Statistical Office’s second advance estimate of 7.6%. Economists described the overall performance as “fairly robust” despite headwinds from US tariffs and the late-quarter escalation in West Asia tensions.
In Q4, mining, utilities, and financial, real estate & professional services sectors showed healthy momentum, while demand-side indicators remained largely resilient. Economists estimated private final consumption expenditure growth in the range of 5.2–6.4% and government final consumption expenditure growth at 4.6–5.5% in Q4. Gross fixed capital formation is seen expanding between 6.4% and 7.5%.
Rajani Sinha, Chief Economist at CareEdge Ratings, noted that activity was robust in the first two months of the quarter but appeared to lose steam in March due to the emerging crisis. High-frequency indicators held up reasonably well. Gaura Sengupta, Chief Economist at IDFC First Bank, pointed out that consumers were shielded from the oil price shock as retail fuel prices remained unchanged. “Listed companies’ margins also held up in Q4 despite rising costs in March, aided by inventory drawdown,” she said. Some moderation was visible in freight transport indicators across rail, shipping, and road segments. Sengupta added that gross value added (GVA) growth could exceed GDP growth due to rising subsidy outlays.
Suman Chowdhury, Chief Economist at SIDBI, highlighted a “meaningful” pick-up in government capital expenditure in Q4, supported by the Union Budget’s focus on infrastructure. Rural consumption remained firm on the back of strong agricultural output, while urban demand showed a healthy recovery following the GST relief announced in September 2025, Chowdhury said.
Outlook for FY27
For FY27, the polled economists project GDP growth at 6.6%, citing risks from a deficient monsoon and elevated oil prices due to the West Asia conflict.
Megha Arora of India Ratings and Research listed additional downside risks: a depreciating currency, weaker-than-expected government capex, subdued global trade, and soft industrial production.
Dipti Deshpande, Principal Economist at Crisil Limited, warned that a prolonged or escalated conflict could keep input costs elevated throughout the year, squeezing producer margins and restricting pricing power amid rising inflation. She expects nominal GDP growth to rise to 11–13% on account of a higher GDP deflator amid expectations of higher inflation.
Radhika Rao, Senior Economist and Executive Director at DBS Bank, highlighted potential spillover effects and supply-chain disruptions as the primary risks. “A prolonged disruption in the supply of critical inputs could hit key manufacturing sectors such as plastics, food, pharma, paints, and packaging, weighing on overall industrial output,” she said. Consumption demand also faces moderation risks as cost pressures are eventually passed on to consumers.
TOPICSECONOMYGDPUS Israel Iran WarThis article was first uploaded on May twenty-seven, twenty twenty-six, at sixteen minutes past six in the evening.