New Delhi: Economists have welcomed India’s advance GDP estimates for the financial year 2025-26, expressing optimism that a bilateral trade deal with the United States will further encourage investment in the country.
The government has released the first advance estimate of GDP growth for 2025-26, projecting a robust expansion rate of 7.4 percent.
Experts attributed the strength of the Indian economy to factors such as the implementation of GST 2.0, income tax reductions, and increased festive season demand, all contributing to sustained economic momentum.
Jahnavi Prabhakar, an economist at Bank of Baroda, pointed out that high-frequency indicators like automobile sales have recently surged, indicating strong demand. She added that trade agreements with countries including the UK, Oman, and New Zealand are expected to provide further impetus to the economy.
However, Prabhakar also cautioned that global uncertainties, including US tariffs, continue to pose risks to India’s economic outlook.
Looking ahead, she emphasized that both investment and consumption will remain key drivers of growth in the coming months. Attention will also focus on the upcoming Union Budget, corporate performance in the third and fourth quarters, and Reserve Bank of India’s interest rate decisions. Prabhakar projected India’s real GDP growth rate to remain between 7 and 7.5 percent in FY27, following an estimated range of 7.4 to 7.6 percent in FY26.
Rajiv Juneja, President of PHD Chamber of Commerce and Industry (PHDCCI), noted that the strong real GDP growth exceeding 7 percent is supported by government expenditure and industrial investment incentives.
He estimated that government final consumption expenditure (GFCE) will rise to 5.2 percent and gross fixed capital formation (GFCF) to 7.8 percent in the 2025-26 fiscal year.
Dr. Ranjit Mehta, CEO and Secretary General of PHDCCI, highlighted the government’s continued focus on strengthening supply chains, accelerating structural reforms, and boosting infrastructure development. He stated that these measures, along with a robust economic framework and increasing private investment, will accelerate India’s growth trajectory and prepare the economy for sustainable and strong development.
Senior economist Rahul Agarwal of ICRA Limited remarked that growth in the industrial and agricultural sectors is expected to outperform the National Statistical Office’s second-half estimates for FY26, while growth in the services sector may be somewhat lower.
Overall, India’s economic outlook remains positive, supported by solid domestic demand, strategic trade partnerships, and targeted government policies.
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