India’s GDP Grows 7.8% in Q4FY26; Full-Year Real GDP Rises 7.7% to ₹323.12 L Cr

Mumbai, June 5: India’s economy maintained strong momentum through the final quarter of FY2025-26, with real GDP growing 7.8% in Q4 (January-March 2026) to reach ₹87.77 lakh crore, up from ₹81.40 lakh crore in Q4 FY25, according to provisional estimates released by the Ministry of Statistics and Programme Implementation on June 5. Nominal GDP for Q4 grew 9.1% to ₹94.65 lakh crore.

Full-Year Figures

For the full year, real GDP grew 7.7% to ₹323.12 lakh crore in FY2025-26, accelerating from 7.1% in FY2024-25, while nominal GDP rose 8.9% to ₹346.36 lakh crore. Real GVA grew 7.9% to ₹294.91 lakh crore for the year.

The secondary and tertiary sectors were the principal drivers of growth. Manufacturing posted 10.7% real GVA growth for the full year, while Trade, Hotels, Transport and Communication grew 11.0% and Financial, Real Estate and Professional Services expanded 10.4% — all three registering double-digit growth at both constant and current prices. The primary sector grew at a more modest 3.2%, supported by agriculture and fisheries.

Expenditure

On the expenditure side, Private Final Consumption Expenditure grew 7.7% and Gross Fixed Capital Formation rose 8.2% for the full year, both exceeding the 7.5% threshold. In Q4 specifically, GFCF surged 10.8% and PFCE grew 7.1%. Per capita GDP rose to ₹2,27,447 for FY26, up 6.8% from ₹2,12,979 the previous year.

Key indicators from the annexure reinforce the broad-based nature of the recovery: Commercial vehicle sales grew 12.6% annually, household vehicle registrations jumped 17.4%, cement production rose 8.7% and finished steel consumption grew 8.0%. Exports of goods and services expanded 9.3% for the year, while air international passenger traffic grew 9.7%.

RBI Keeps Repo Rate Unchanged

In the morning, the Reserve Bank of India announced its monetary policy decision at 10 am. RBI Governor Sanjay Malhotra, leading the Monetary Policy Committee, kept the benchmark repo rate unchanged at 5.25%, choosing to prioritise inflation management and growth stability over rupee defence even as the currency has weakened approximately 5% since February.

The decision was widely anticipated by economists and market participants. Malhotra said the MPC had observed a deterioration in the global economic environment and believed it would be prudent to await greater clarity on evolving risks before making any policy adjustments. He flagged two specific downside risks to economic growth: the uncertain global environment — shaped in large part by the ongoing West Asia conflict and its impact on crude oil prices and capital flows — and the possibility of a weaker-than-expected monsoon season, which could dampen agricultural output and rural consumption.

Source:

• https://www.mospi.gov.in/latest-releases