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India's Economy Surges to 7.3% in Q4 Despite Global Woes
25 May
Summary
- India's Q4 FY26 GDP growth is projected at 7.3%, slowing from previous quarters.
- Economists forecast FY26 growth at 7.6%, aligning with government estimates.
- Resilient domestic demand, especially in retail, bolsters economic performance.
India's economy concluded the 2026 fiscal year on a strong trajectory, with economists projecting a 7.3% gross domestic product (GDP) growth for the March quarter. This expansion was primarily fueled by robust domestic demand, agricultural output, and a thriving services sector.
Despite the worsening global conflict in Iran, which began on February 28, 2026, and led to sharply higher crude prices, the Indian economy demonstrated resilience. Activity momentum in January and February likely offset the conflict's impact in March. Economists forecast overall FY26 growth at 7.6%, aligning with the government's February estimate.
Consumption remained a key driver, with retail volumes for tractors and two-wheelers increasing by 23% and 25%, respectively. Although industrial production growth moderated slightly to 4.8% due to slower manufacturing expansion, sectors like mining and financial services maintained healthy momentum. Companies appeared to absorb emerging cost pressures by utilizing inventories.
