Manufacturing and services offset challenges, supporting stronger annual growth.
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Riding on robust performance in the manufacturing and services sectors, the Indian economy beat expectations to record 7.7 per cent growth during the full fiscal year of FY26 against 7.1 per cent of the previous year, according to government data . However, growth during January-March (Q4) quarter of FY26 declined to 7.8 per cent against 8 per cent of October-December (Q3) quarter in the same fiscal. “India’s growth momentum remains strong,” Prime Minister Narendra Modi said in a social media post, adding that full fiscal and fourth-quarter numbers reflect the inherent strength of the economy, the success of reforms and the hard work of 140 crore Indians. “We shall leave no stone unturned to further ‘Ease of Living,’ ‘Ease of Doing Business’ and increase opportunities for our youth,” he said.Finance Minister Nirmala Sitharaman said Manufacturing, Trade, Repair, Hotels, Transport, Communication & Services related to Broadcasting, Storage and Financial, Real Estate & Professional Services sectors have attained double-digit growth at both Constant and Current Prices in FY26. “Our government is committed to further drive the ‘Reform Express’ with decisive policy measures to ensure positive economic momentum amidst the global challenge,” she said in a social media post.However, with strong headwinds, experts estimate growth in FY27 to slow down.“Assuming an average crude oil price of $95/barrel, ICRA pegs the GDP growth to slow down to sub-6.5 per cent in FY27 with the West Asia crisis expected to transmit to lower growth outcomes, particularly in H1 FY2027. However, nominal GDP expansion is set to improve to above 12 per cent in FY27 from 8.9 per cent in FY26, on the back of unpalatably higher inflation,” said Aditi Nayar, Chief Economist with ICRA.Published on June 5, 2026
