India GDP Q3 FY26 Highlights: Growth at 7.8% in Oct–Dec after data revamp; FY26 forecast raised to 7.6%

India’s gross domestic product (GDP) growth slowed to 7.8% in the third quarter of FY26, beating estimates of 7.4% but easing from the previous quarter’s 8.4% expansion, amid a reset in the country’s economic data. The full-year FY26 growth projection has been revised to 7.6% from 7.1% in the previous year.

According to an ET poll, expectations for quarterly GDP growth ranged between 7% and 8.7%, with the latest print indicating that economic activity remained stronger than anticipated.

For the full fiscal year ending in March, the government expects the South ⁠Asian economy ‌to have grown by 7.6 per cent, the National Statistics ⁠Office said. It had been forecast to grow by 7.4 per cent under the old data series.


Also Read | India's Q3 FY26 GDP growth slows sequentially to 7.8% under new series; FY26 estimate rises to 7.6%

Prime Minister Narendra Modi's government has undertaken to revamp economic data, including for inflation ‌and gross domestic product, by expanding the sources of information and ⁠updating the base year to 2022-23, among other changes. The adjustments aim to address criticism of outdated data practices and enhance accuracy.

According to the new series, the gross domestic product (GDP) is estimated to grow at 7.6 per cent during the current fiscal, as against 7.4 per cent in the advance estimates released by the ministry in January.

Also, the growth rate for the July-September period of 2025-26 has been revised upwards to 8.4 per cent from 8.2 per cent.

However, the growth rate for the first quarter was revised downwards to 6.7 per cent from 7.8 per cent.

Overview

• India’s real GDP growth estimate for FY2025-26 has been raised to 7.6% under the new base year (2022-23), compared to 7.4% under the old 2011-12 series and 7.1% in FY2024-25.
• The revision follows the release of a new national accounts series by the National Statistics Office (NSO), marking the 9th base revision of India’s GDP data.
• Real GDP in Q3 (October-December) FY2025-26 grew 7.8%, moderating from the revised 8.4% in Q2.
• Q2 growth was revised up to 8.4% (from 8.2% in old series), while Q1 growth was revised down to 6.7% (from 7.8%).
• India’s nominal GDP growth for FY2025-26 is estimated at 8.6%.
• Real GDP is estimated to reach Rs 322.58 lakh crore in FY2025-26, up from Rs 299.89 lakh crore in FY2024-25.
• Under the new series, nominal GDP for FY2024 and FY2025 is estimated to be 3.8% lower each year compared to the old base year calculations.
• The fiscal deficit target for FY2027 could be 4.46% of GDP under the new series, versus 4.3% assumed in the Budget (as per ICRA estimates).
• Chief Economic Advisor V Anantha Nageswaran said FY2026-27 growth projection has been revised upward by 20 basis points to 7–7.4%, from the 6.8–7.2% estimated in the Economic Survey.
• The Economic Survey had earlier projected 6.8–7.2% growth for FY2026-27.
• The economy is expected to grow closer to 7.4% rather than 7% next fiscal, with nominal GDP growth near 11%, potentially taking the economy past the USD 4 trillion mark.
• Services and manufacturing were key growth drivers in FY2025-26, with manufacturing clocking double-digit growth in select years after rebasing.
• The ‘Trade, Repair, Hotels, Transport, Communication and Services related to Broadcasting, Storage’ sector grew 10.1% in FY2025-26 (constant prices).
• On the demand side, both Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) recorded over 7% growth in FY2025-26.
• The new GDP series incorporates improved datasets from GST, PFMS, E-vahan and annual surveys such as ASUSE and PLFS.
• The methodology introduces double deflation in manufacturing and agriculture, replaces single deflation, and uses more granular deflators.
• Household sector estimates will now be based on annual surveys instead of proxy indicators or inter-survey growth assumptions.
• The new series provides:
• Second Advance Estimates of Annual GDP for FY2025-26
• Quarterly GDP estimates from Q1 FY2022-23 to Q3 FY2025-26

India and US ties trade tensions

India’s government has remained optimistic about growth outlook for the current and next financial year, despite trade tensions with the US for much of last year. The two countries agreed to a trade deal earlier this month, and senior officials have said it could lift growth estimates further. However, the outlook for those trade terms is now uncertain after the Supreme Court ruled against the Trump administration’s tariffs.

To shield the economy from trade disruptions, the government last year rolled out sweeping reforms, including an overhaul of consumption taxes. Friday’s data will also provide the first full-quarter snapshot since those tax cuts, covering the October-to-December period. According to the median of 34 economists in a Bloomberg survey, the October-to-December quarter may show growth of 7.6% under the new base year.