India’s Economy Expands 7.8% in March Quarter Despite Global Turmoil; Annual Growth Rises to 7.7%

According to official government data, the Indian economy grew by 7.7 percent during the 2025-26 financial year, reflecting stronger performance compared to the previous fiscal year. In 2024-25, the economy had expanded at a rate of 7.1 percent, highlighting an improvement in overall economic activity despite external challenges.

The Ministry of Statistics and Programme Implementation stated that the size of Gross Domestic Product at constant prices is estimated to rise to ₹323.12 lakh crore in the 2025-26 financial year, up from the first revised estimate of ₹299.89 lakh crore in 2024-25. At current prices, the size of the economy is projected to reach ₹346.36 lakh crore in 2025-26, compared with ₹318.07 lakh crore in 2024-25, representing an increase of 8.9 percent.

India has recently adopted a new Gross Domestic Product series with 2022-23 as the base year. Under the revised framework, national income estimates have been updated to better capture post-pandemic consumption patterns and the rapidly expanding influence of the digital economy. The latest release marks the second set of Gross Domestic Product figures issued under the revised base year methodology.

Meanwhile, the Reserve Bank of India has lowered its Gross Domestic Product growth forecast for the current financial year to 6.6 percent, citing global uncertainties and elevated raw material prices. The previous projection had been 6.9 percent. The revised estimate is also lower than the projected growth rate of 7.6 percent for 2025-26.

The central bank warned that higher energy and commodity prices, along with continuing supply disruptions, could weigh on economic activity. According to the Reserve Bank of India, prolonged disruptions in global supply chains, increasing volatility in international financial markets, and weather-related shocks remain significant risks to domestic growth prospects.

In addition, the Reserve Bank of India has raised its retail inflation forecast for 2026-27 to 5.1 percent from the earlier estimate of 4.6 percent. Inflationary pressures are expected to intensify during the third quarter, with price growth potentially reaching 5.9 percent before easing in subsequent periods.

The latest economic data underscores the strength of India’s growth trajectory at a time of heightened geopolitical uncertainty and persistent global market disruptions. While the economy has delivered stronger annual growth and expanded in size, concerns over inflation, supply chain challenges, commodity prices, and external shocks continue to shape the outlook for the coming years.