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India's Economy to Grow 7.4% in FY26, Services Sector Leads Charge

India's economy is forecast to grow by 7.4% in the 2025-26 financial year, according to the first advance estimates released by the National Statistics Office. This marks an acceleration from the 6.5% growth estimated for the previous fiscal year. The growth is largely driven by the services sector, with financial and professional services projected to expand by a robust 9.9%. Strong investment activity and steady household consumption are also key contributors to the positive economic outlook.

Key Points: India's FY26 GDP Growth Forecast at 7.4% by NSO

  • FY26 Real GDP growth pegged at 7.4%
  • Services sector GVA to expand by 7.3%
  • Investment (GFCF) growth projected at 7.8%
  • Agriculture sector growth more moderate at 3.1%
2 min read

India's economy to grow by 7.4% in FY26, driven largely by service sector: NSO Data

India's economy is projected to grow 7.4% in FY26, driven by a robust services sector and strong investment, according to NSO advance estimates.

"The growth momentum is being driven largely by the services sector - NSO"

New Delhi, January 7

The Real GDP has been estimated to grow by 7.4% in the Financial year 2025-26 against the growth rate of 6.5% during FY 2024-25, as per the first advance estimates released by the National Statistics Office on Wednesday.

The Nominal GDP is estimated to grow at 8% in FY 2025-26, it said.

Real GDP is estimated to attain a level of Rs 201.90 lakh crore in FY26, against the Provisional Estimates (PE) of GDP for FY25 of Rs 187.97 lakh crore

Nominal GDP is estimated to reach Rs 357.14 lakh crore in FY 2025-26, up from Rs 330.68 lakh crore in FY 2024-25.

Further, the Real Gross Value Added (GVA) is estimated at Rs 184.50 lakh crore in FY 2025-26, up from the Provisional Estimates for FY 2024-25 of Rs 171.87 lakh crore, reflecting a 7.3% growth rate.

Nominal GVA is estimated to reach Rs 323.48 lakh crore in FY 2025-26, up from Rs 300.22 lakh crore in FY 2024-25, reflecting a 7.7% growth rate.

Nominal GDP uses current prices, including inflation, while Real GDP adjusts for inflation using base-year prices, showing true output growth.

The NSO said the growth momentum is being driven largely by the services sector, with real Gross Value Added (GVA) projected to expand by 7.3%. Financial, real estate, and professional services, along with public administration, defence, and other services, are estimated to grow by a robust 9.9% at constant prices during the year.

Manufacturing and construction are also expected to support overall growth, with the secondary sector projected to grow by 7.0%, while trade, hotels, transport, communication, and broadcasting services are projected to expand by 7.5%. In contrast, the agriculture and allied sector is estimated to post a more moderate growth of 3.1%

On the demand side, private final consumption expenditure (PFCE) is estimated to grow by 7.0%, reflecting steady household spending. Gross fixed capital formation (GFCF), a key indicator of investment activity, is projected to rise by 7.8%, up from 7.1% in the previous fiscal year.

- ANI

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Reader Comments

P
Priyanka N
Good to see the numbers, but I hope this growth translates into more jobs for our youth. The service sector is booming, but manufacturing needs to catch up to create mass employment.
R
Rahul R
The agriculture growth at only 3.1% is worrying. We are a farming nation. If the benefits of this 7.4% growth don't reach our farmers and villages, it's not truly inclusive development.
S
Sarah B
As someone working in IT services in Bangalore, I can feel this momentum. The demand for our skills is global. The 9.9% growth in financial and professional services is no surprise!
V
Vikram M
The increase in Gross Fixed Capital Formation to 7.8% is the real story here. It shows businesses are investing more in the future. This builds a strong foundation for sustained growth. Well done!
K
Karthik V
Respectfully, while the headline number looks great, I'm concerned about the gap between nominal (8%) and real (7.4%) GDP. It suggests inflation is still a silent tax on the common man's income. We need to control prices.
M
Meera T
Construction growing at 7% is excellent! You can see it everywhere with new infrastructure projects. It creates jobs for skilled and un

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