India's economy is projected to grow at 7.4% in fiscal year 2025-26, according to the First Advance Estimates released by the Ministry of Statistics and Programme Implementation. This represents a notable increase from the 6.5% growth recorded in FY2024-25. The government anticipates nominal GDP to expand by 8.0% during the same period.
The robust growth is attributed to the strong performance of the services sector, which is expected to be a major driver of the estimated Real Gross Value Added (GVA) growth rate of 7.3% in FY2025-26. Within the services sector, the financial, real estate, and professional services, along with public administration, defense, and other services, are projected to achieve a substantial growth rate of 9.9% at constant prices. Trade, hotels, transport, communication, and broadcasting-related services are also expected to contribute significantly, with an estimated growth of 7.5%.
The manufacturing and construction sectors are also projected to support overall growth, with an anticipated growth rate of 7.0%. In contrast, the agriculture and allied sectors are expected to experience more moderate growth of 3.1%.
Real GDP, or GDP at Constant Prices, is estimated to reach ₹201.90 lakh crore in FY 2025-26, compared to ₹187.97 lakh crore in FY 2024-25. Nominal GDP is projected to reach ₹357.14 lakh crore in FY 2025-26, up from ₹330.68 lakh crore in the previous fiscal year.
Private Final Consumption Expenditure (PFCE) is estimated to grow by 7.0%, indicating consistent household spending.
These advance estimates are closely watched by policymakers, investors, and markets for insights into consumption trends, investment momentum, and the impact of global uncertainties. They also serve as a crucial input for the Union Budget, which is scheduled to be presented on February 1st. The government utilizes these estimates to establish a nominal GDP growth level for the upcoming financial year, which informs revenue and expenditure projections and the overall policy framework.
The Ministry of Statistics has indicated that the Second Advance Estimates for FY26 GDP will be released on February 27.
