India’s growth outlook remains buoyant, with both global and domestic institutions upgrading their assessments for the current financial year on the back of strong economic fundamentals, the government said on Tuesday. The Reserve Bank of India has revised its GDP growth projection for FY26 upward from 6.8% to 7.3%. International agencies have echoed similar optimism, the government added.
“Together, sustained international confidence along with robust domestic demand, falling unemployment, and easing inflation, position the country well to advance steadily towards its 2047 development goals,” the statement read.
Describing 2025 as a defining year for India’s growth trajectory, the government said the country is among the world’s fastest-growing major economies and is well positioned to sustain this momentum.
Government on India’s surging GDP growth rate
The expansion of Gross Domestic Product (GDP) to a six-quarter high in the second quarter of FY26 reflected India’s resilience amid persistent global trade uncertainties. Domestic growth drivers—led by robust private consumption—played a central role in supporting this expansion, it said.
“India’s real GDP grew 8.2% in Q2 FY 2025–26, up from 7.8% in the previous quarter and 7.4% in Q4 of 2024–25, led by resilient domestic demand amidst global trade and policy uncertainties. Real gross value added (GVA) expanded by 8.1%, catalysed by buoyant industrial and services sectors,” the government said.
India surpasses Japan to become world’s fourth largest economy
With GDP valued at $4.18 trillion, India has surpassed Japan to become the world’s fourth-largest economy and is poised to displace Germany from the third position over the next 2.5 to 3 years, with projected GDP of $7.3 trillion by 2030, the government said.
It further noted that high-frequency indicators point to sustained economic activity, with inflation remaining below the lower tolerance threshold, unemployment on a declining trajectory, and export performance continuing to improve.