India's gross domestic product (GDP) grew by 7.8% in the January-March quarter, under the new series, as per the statistics released by the government on Friday. This is slightly lower as compared to the 8% growth posted in the preceding quarter.
The fourth quarter growth is higher than the estimate of 7.3%, as projected by the analysts tracked by Bloomberg.
For the full financial year (FY26), the economy expanded at a robust 7.7% year-on-year, comfortably outperforming the Street's estimate of 7.5%. This strong full-year print underscores the resilience of domestic macroeconomic fundamentals, which have sustained momentum despite escalating geopolitical headwinds and crude oil volatility triggered by the West Asia conflict.
Gross Value Added (GVA)—which strips out the impact of indirect taxes and subsidies to map the true picture of economic activity—surged by 7.9% in the January-March quarter. This was a sharp beat against the 7.3% consensus estimate, indicating that underlying productive momentum across sectors remains exceptionally solid.
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Services And Finance Lead The Charge
The fourth-quarter growth was heavily anchored by the services and financial sectors, both of which delivered double-digit expansion. The contact-intensive trade, hotels, transport, and telecom segment was the standout performer, clocking a massive 12.5% year-on-year growth.
The finance and real estate sector closely followed, expanding by 10.4% during the March quarter. This reflects sustained credit demand, robust corporate earnings, and stable urban consumption patterns despite a high-interest-rate environment.
Manufacturing Holds Ground, Agriculture Lags
On the industrial front, the Manufacturing sector demonstrated structural resilience with a solid 7.3% year-on-year growth. The data indicates that factory output has largely absorbed the initial shocks of global supply chain disruptions and elevated input costs.
Construction activity also remained a vital growth engine, expanding by 8.4%, driven by the government's sustained capital expenditure push and a buoyant housing market.
However, the rural economy remains a distinct pressure point. The farm sector recorded a sluggish 3.6% growth in the fourth quarter, weighed down by the lingering impacts of erratic weather patterns and sub-par monsoon expectations.
Other key sectoral growth rates for the January-March period include public administration and defence, which grew at 5.8%, mining, which is up 5.4%, and power and gas which logged a 4.1% growth.
The stronger-than-expected GDP print provides a crucial buffer for policymakers. Arriving on the same day the Reserve Bank of India maintained its repo rate at 5.25%, the data reinforces the central bank's stance: domestic growth remains structurally intact, providing the headroom required to keep monetary policy focussed on managing imported inflation.
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