India’s Q4 GDP growth seen at 7.3% amid Iran war tensions

New Delhi: The Indian economy likely closed FY26 on a strong note, with growth in the March quarter bolstered by robust domestic demand, agricultural activity, and services despite the worsening impact of the Iran war later in the three-month period, according to an ET poll of economists.

Sharply higher crude prices and continued energy supply disruptions due to the conflict that began on February 28 could however weigh on growth this fiscal year, the economists said.

The median estimate of 10 economists pegged India's gross domestic product (GDP) growth at 7.3% year-on-year in the fiscal fourth quarter, with forecasts ranging from 6.7% to 7.4%. Even so, growth slowed to a three-quarter low from 7.8% in Q3 and 8.4% in Q2.

For FY26, economists projected a median growth of 7.6%, with estimates ranging between 7.4% and 7.6%, in line with the government's estimate in February.

The National Statistical Office will release official GDP data for Q4 and provisional FY26 estimates on June 5.

Rajani Sinha, chief economist at CareEdge Ratings, said sectors such as mining, utilities, and financial, real estate, and professional services maintained healthy momentum in the three-months ended March.

"The activity momentum in January and February continued to remain strong and likely offset the impact of the conflict in March," said Sakshi Gupta, principal economist at HDFC Bank.

Radhika Rao, senior economist and executive director at DBS Bank, said cost pressures became evident across supply chains late in the March quarter, though companies likely absorbed these by tapping into inventories and not meaningfully scaling back production.

Consumption remained resilient in Q4, with domestic tractor and two-wheeler retail volumes rising 23% and 25%, respectively. However, industrial production growth moderated to 4.8% from 5.2% in Q3 due to slower manufacturing expansion.