India’s economy grew 7.8% in the October–December 2025 quarter, according to newly released figures from the National Statistics Office. This rate reflects the economy’s performance after a major revision of India’s national accounts methodology. Under the previous framework, the pace of growth appeared different. However, the revised series aims to improve accuracy and better reflect economic activity.

The latest data show a slight slowdown from the 8.4% expansion seen in the July–September quarter. Nevertheless, strong private consumption and robust service and manufacturing output helped sustain overall growth momentum. India remains among the world’s fastest-growing major economies based on these revised figures.

📊 Full-Year Growth and Forecasts

For the fiscal year ending 31 March 2026, India’s growth estimate moved up to 7.6% under the updated data series. This projection exceeds the earlier estimate of 7.4% under the old methodology. As a result, policymakers are encouraged by the sustained economic momentum despite uneven performance across sectors.

Economists also revised projections for the next fiscal year (2026–27). Growth is now expected in a range of 7.0% to 7.4%, reflecting confidence in continued private demand, investment gains, and broader economic reforms. These estimates show resilience in the Indian economy, even as global uncertainties linger.

📉 Why Growth Slowed in the Quarter

Officials noted that government spending and corporate investment did not expand as quickly as in previous quarters. At the same time, private consumption remained strong, rising notably in retail, hospitality, and essential services. Because consumption accounts for a large share of GDP, its strength helped cushion the overall slowdown.

Manufacturing also continued to perform well, supported by demand for durable goods and improvements in domestic output. Meanwhile, agriculture — a sector employing millions — saw modest growth, reflecting mixed results across states and cropping cycles.

📈 Data Methodology Changes

The government recently revamped how it compiles GDP data. This overhaul included using 2022–23 as the base year and integrating broader sources such as new tax data and digital economic indicators. These methodological improvements aim to capture economic activity more fully, especially in the informal sector.

Because of these changes, direct comparisons with previous years require caution. However, analysts say the revisions make growth estimates more reflective of India’s real economic structure. They also help policymakers design better-informed strategies.

💼 Sector Highlights

Private consumption grew strongly in the October–December quarter, rising faster than in the previous period. This reflects heightened demand for goods and services across urban and rural markets. Services such as finance, hospitality, and transportation showed notable resilience.

Manufacturing held a steady pace as well. Factory output expanded, and industrial demand remained robust, supported by investment in infrastructure and domestic supply chains. This helped offset weaker contributions from government spending.

Agriculture growth was modest. Production gains varied across regions, with some areas facing weather and supply challenges. Still, the overall sector continued to contribute to employment and rural demand.

📉 Outlook and Risks Ahead

Despite positive signals, economists caution about potential risks. Global trade tensions and tariff barriers could weigh on export performance in the near term. Nonetheless, domestic reforms and policy support provide a buffer against external headwinds.

Policy actions, including tax adjustments, labour reforms, and efforts to strengthen the investment climate, remain priorities for sustaining growth. With strong private consumption and ongoing structural changes, India’s economy is positioned for steady performance in the coming year.