India’s economy grew 7.8% year-on-year in Q4FY26, and 7.7% YoY in FY26, according to the provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday.
India’s real Gross Domestic Product (GDP) in Q4FY26 is estimated to grow at Rs 87.77 lakh crore, up from Rs 81.40 lakh crore in Q4FY25, showing a growth rate of 7.8%. Nominal GDP expanded 9.1% during the quarter to Rs 94.65 lakh crore. real GVA estimated to grow 7.9%, while nominal GVA increased 9.9%.
FY26 growth estimated at 7.7%
In FY26, India’s economy grew 7.7%, up from 7.1% in FY25. Real GDP at constant prices is estimated to have reached Rs 323.12 lakh crore in FY26, compared with Rs 299.89 lakh crore in FY25.
In nominal terms, GDP is estimated to have reached Rs 346.36 lakh crore in FY26, up 8.9% from Rs 318.07 lakh crore a year earlier.
India’s real GVA grew 7.9% in FY26 to Rs 294.91 lakh crore from Rs 273.36 lakh crore in FY25, while nominal GVA is estimated to have increased 9.1% to Rs 314.87 lakh crore.
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RBI cuts FY27 GDP growth forecast to 6.6% amid Middle East conflict
India’s economy is now facing geopolitical tensions arising from the Middle East conflict, which has disrupted the Strait of Hormuz, one of the world’s key oil supply routes. Oil prices have been surging since the Iran-US conflict began in late February. Indian oil marketing companies (OMCs) have also started passing on the impact of higher crude prices to consumers. Petrol and diesel prices have already been increased four times in May.
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Against this backdrop, the RBI, in its monetary policy announcement on Friday, projected India’s GDP growth for FY27 at 6.6%, lower than its earlier estimate of 6.9%, citing higher energy costs, global supply constraints, and uncertainty surrounding the duration of the conflict.
“Going ahead, the rise in prices of energy and other inputs, coupled with supply disruptions, is likely to weigh on economic activity,” the RBI noted.
Economists Warn of War Risks and Supply Disruptions Looming in FY27
“Growth wrapped up FY26 on a strong note. High-frequency data for rural and urban demand had pointed to relative resilience in the quarter. While the U.S.-Iran conflict broke out towards the end of the fourth quarter of FY26, output in the quarter was relatively insulated from bulk of adverse impact,” Radhika Rao, Senior Economist, DBS Bank, Singapore, told Financial Express Digital.
She added: “Markets are likely to move on from the backward-looking data and focus on potential spillover risks into FY27, particularly given the prospect of a prolonged disruption in the supply of critical inputs to downstream industries, higher energy as well as food costs impacting purchasing power and tighter financial conditions.”
“Sustaining 7.7% annual growth in the overarching global setting of uncertainty will require “stronger private investment, productivity gains, and broader consumption recovery with coordinated and concerted measures by all stakeholders with a sense of urgency,” said Apoorva Javadekar, Chief Economist, Muthoot Fincorp, Mumbai.
TOPICSECONOMYGDPGDP growthManufacturingThis article was first uploaded on June five, twenty twenty-six, at thirty-one minutes past four in the afternoon. © IE Online Media Services (P) Ltd