Growth in the preceding quarter was 8.4%. Under the new series — the base year moving to FY23 from FY12 — full-year FY26 growth is now projected at 7.6%, up from 7.4% in the first advance estimates released in January.
The Economic Survey’s real GDP growth projection for FY27 has been revised upward to 7-7.4% from 6.8-7.2% based on the old series. “At the moment we feel that risk is on the upside,” said chief economic adviser V Anantha Nageswaran, adding that consumption and investment will remain key growth drivers.
FY25 growth has been revised upward to 7.1% from 6.5%, while FY24 has been sharply marked down to 7.2% from 9.2%, reflecting methodological changes and updated datasets.
The latest overhaul improves coverage of the informal sector and aligns India’s methodology more closely with international standards. Statistics secretary Saurabh Garg said the changes will address concerns flagged by the International Monetary Fund, which had assigned India’s national accounts a C rating in November 2025.
Manufacturing output surged to an eight-quarter high of 13.3% in the third quarter, while the services sector expanded 9.5%, a seven-quarter high.“Q3 GDP numbers overall signal an acceleration in economic momentum despite tariff threats,” said Sakshi Gupta, principal economist, HDFC Bank. She added that Q3 growth was strong, despite a high base.
India faced a 50% tariff by the US during the third quarter, which has since dropped to 10%.
The quarter also benefited from indirect tax rationalisation and festive demand, said Radhika Rao, executive director and senior economist at DBS Bank. In contrast, agriculture output slowed to an eight-quarter low of 1.4%.
“The moderation in GDP growth (from Q2) was expectedly driven by the agriculture and the non-manufacturing industrial sectors, including mining, electricity and construction segments,” said Aditi Nayar, chief economist, Icra.
Gross value added (GVA) rose 7.8% in the third quarter, slower than 8.6% in the preceding quarter.
Gross fixed capital formation, a measure of investment, grew 7.8% in the December quarter, easing from 8.4% in the preceding one.
Private final consumption expenditure increased 8.7% in October-December, against 8% in the preceding quarter. Meanwhile, government final consumption expenditure fell significantly to 4.7% from 6.6% over the same period.
Exports grew 5.6% in the third quarter, significantly lower than 10.2% in the quarter before. Imports, on the other hand, rose by 8.6% in Q3 from 5.9%.
Outlook
The 7.6% full-year growth forecast for FY26 implies fourth quarter growth of around 7.3%. The chief economic adviser said current economic momentum and high-frequency indicators suggest the economy is well positioned to achieve that pace. He added that improved policy certainty resulting from successful trade talks with the US, the European Union and others will support exports and capital flows.
Manufacturing growth has consistently outperformed earlier estimates, expanding 11.5% in FY26. Gupta attributed this to the change in deflator calculation as well as a better accounting of the informal sector.
HDFC Bank estimates real GDP growth for FY27 at 7-7.2% while Icra projects it at 7%, supported by developments such as a lower US tariff rate under an interim deal and improved domestic investment prospects.