India forecasts 2025/26 economic growth at 7.4%

[NEW DELHI] India’s economy is expected to grow 7.4 per cent in the fiscal year ending in March, the National Statistics Office said on Wednesday (Jan 7), above the government’s initial projection of 6.3 per cent-6.8 per cent.

India’s first advance estimate of gross domestic product (GDP), which will undergo revisions over time as data coverage improves, will be used as a base for the federal budget due to be announced on Feb 1.

The Indian economy grew 6.5 per cent in 2024/25 and 9.2 per cent in 2023/24.

In nominal terms, which factor in inflation, the economy is expected to grow 8 per cent, compared with the 10.1 per cent estimate in the annual federal budget announced last February.

Private consumption, which accounts for about 60 per cent of GDP, was seen expanding by 7 per cent year on year compared to a 7.2 per cent expansion last fiscal year.

Government spending is estimated to rise by 5.2 per cent year on year in 2025/26, up from a 2.3 per cent increase the previous year, while private investment is seen rising by 7.8 per cent, higher than the 7.1 per cent growth the year before.

SEE ALSO

India exporters risk losing US orders without January trade deal

Cloudy outlook for Indian equities in 2026

Trump warns of higher tariffs on India over Russian oil purchases

Manufacturing, which accounts for about 13 per cent of GDP, is projected to expand 7 per cent year on year in 2025/26, compared with 4.5 per cent a year ago, while construction output was seen growing by 7 per cent, down from 9.4 per cent in the previous year, data showed.

Growth in farm output, that employs more than 40 per cent of the workforce, was seen picking up to 3.1 per cent in the current fiscal year from 4.6 per cent a year ago. REUTERS