Strong performance in services, manufacturing and financial sectors helped India’s economy surpass expectations in the final quarter of FY26
India’s economy shattered market expectations in the final quarter of fiscal year 2025–26. Driven by a massive output boost in the services and manufacturing sectors, the nation’s real Gross Domestic Product (GDP) accelerated to a stellar 7.8% year-on-year growth in Q4, anchoring the full-year growth rate at a robust 7.7%.
The Economic Scorecard at a Glance
- Q4 Real GDP (Constant Prices): Climbed to Rs 87.77 lakh crore, up from Rs 81.40 lakh crore in the same quarter last fiscal year.
- Q4 Nominal GDP: Estimated at Rs 94.65 lakh crore, marking an expansion of 9.1%.
- Full-Year Real GDP (FY26): Hit Rs 323.12 lakh crore compared to Rs 299.89 lakh crore in FY25 (a 7.7% annual growth rate).
- Full-Year Nominal GDP (FY26): Reached Rs 346.36 lakh crore, representing an 8.9% increase over the previous year.
- Global Standing: With a full-year growth rate of 7.7%, India retains its crown as the fastest-growing major economy in the world.
Q4 GDP Growth At 7.8% As Manufacturing And Services Drive Expansion
Sector-Wise Performance Leaders
- Economic activity—measured via Gross Value Added (GVA)—rose 7.9% in real terms for both Q4 and the full fiscal year. The primary engines of this momentum were the secondary (industrial) and tertiary (services) sectors:
- Tertiary (Services) Sector: Led the charge with an outstanding 9.3% growth at constant prices.
- Secondary (Industrial) Sector: Delivered a strong performance with an 8.8% expansion.
- Primary Sector: Registered a modest but stable 3.2% growth, anchored primarily by steady outputs in agriculture and fisheries.
- Double-Digit Superstars: Key segments—including manufacturing, trade, hotels, transport, communication, financial, real estate, and professional services—all recorded spectacular double-digit growth across both constant and current price metrics during FY26.
Political Friction Sparks Over the Numbers
The stellar economic report card immediately triggered a political showdown. The BJP utilized the data to push back against opposition leader Rahul Gandhi‘s previous warnings of an impending “economic tsunami.”
Taking to social media platform X, BJP leader Amit Malviya stated that the numbers completely washed away “sinister attempts to malign India,” adding:
“The latest GDP data shows India growing at 7.7 per cent in FY 2025-26, the fastest among major economies… The only tsunami visible today is the one drowning the Congress party’s malignant thinking.”
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