India's economy accelerates: GDP growth hits 7.7% in FY26, fastest pace in two years

India's economy expanded by 7.7% in real terms during the financial year 2025-26, marking an acceleration from the 7.1% growth recorded in FY25, according to the provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI). The latest data also showed that the economy maintained strong momentum in the January-March quarter, growing 7.8% year-on-year.

The provisional estimates suggest that India's real Gross Domestic Product (GDP), measured at constant 2022-23 prices, reached ₹323.12 lakh crore in FY26, up from ₹299.89 lakh crore in FY25. Nominal GDP, which reflects current market prices, rose 8.9% to ₹346.36 lakh crore.

Stronger growth across the economy 

The data indicates broad-based economic expansion. Real Gross Value Added (GVA) — a key measure of economic activity excluding taxes and subsidies — grew 7.9% in FY26 compared to 7.3% in the previous financial year. Nominal GVA increased 9.1% to ₹314.87 lakh crore.

The improved growth performance comes despite a challenging global environment and was supported by robust activity across manufacturing, construction, services and agriculture-related sectors.

March quarter remains resilient 

For the fourth quarter of FY26, real GDP was estimated at ₹87.77 lakh crore, up from ₹81.40 lakh crore a year earlier, translating into growth of 7.8%. Nominal GDP during the quarter increased 9.1% to ₹94.65 lakh crore.

Meanwhile, real GVA in Q4 rose 7.9%, while nominal GVA expanded 9.9%, highlighting sustained economic activity during the closing months of the financial year.

Key numbers at a glance 

• FY26 Real GDP Growth: 7.7% 
• FY25 Real GDP Growth: 7.1% 
• FY26 Nominal GDP Growth: 8.9% 
• Q4 FY26 Real GDP Growth: 7.8% 
• Q4 FY26 Nominal GDP Growth: 9.1% 
• FY26 Real GVA Growth: 7.9% 
• FY26 Export Growth: 9.3% 
• FY26 Machinery & Equipment Import Growth: 19.3% 

Indicators point to robust demand 

Several high-frequency indicators cited by the statistics ministry reflected strong underlying demand during FY26.

Foodgrain production increased 5.3% during the year, while cement production rose 8.7% and finished steel consumption grew 8%. Commercial vehicle sales climbed 12.6%, and three-wheeler sales advanced 12.8%, indicating healthy industrial and transport activity.

The transport sector also showed resilience, with international air passenger traffic and cargo handling rising 9.7% annually, while railway passenger kilometres increased 5.3%.

On the trade front, exports of goods and services grew 9.3% during FY26. Imports rose at a faster pace of 11.1%, reflecting strong domestic demand and investment activity. Notably, imports of machinery and equipment jumped 19.3%, often seen as a sign of expanding capital expenditure and industrial capacity.

The government is expected to release the first-quarter GDP estimates for FY27 on August 31, which will provide an early indication of whether the economy has carried forward the strong momentum seen in FY26.