The National Statistics Office (NSO) released its First Advance Estimate (FAE) of GDP for FY 2025-26 on January 7, 2026, projecting that India's Real GDP would grow at 7.4% in FY26, up from 6.5% in FY25. Nominal GDP growth was pegged at 8%. Real GDP was estimated to reach ₹201.90 lakh crore at 2011-12 constant prices. The growth was driven primarily by robust private final consumption expenditure (PFCE) — whose share in GDP rose to 61.5% — along with strong investment demand. Manufacturing sector growth recovered to 9% in Q2 FY26, after a sharp deceleration to 2.2% in Q2 FY25. Retail inflation declined sharply from 4.6% (FY25 average) to 1.7% during April–December 2025, reflecting easing food prices and improved supply chains. The data reaffirmed India as the world's fastest-growing major economy for the fourth consecutive year, surpassing China, the United States, and all G20 peers. India's foreign exchange reserves stood at approximately US$ 687 billion (₹61.96 lakh crore) as of early January 2026. The Economic Survey 2025-26, projected to be released in late January 2026, was expected to project FY27 growth at 6.8–7.2%. Key drivers identified include rising rural consumption (aided by good kharif output), government capital expenditure, declining interest rates following RBI rate cuts, and a favourable monsoon base effect. The FAE forms a key input for Union Budget 2026-27 planning, which was tabled on February 1, 2026.
NSO Releases First Advance Estimate: India's Real GDP to Grow 7.4% in FY26, Fastest-Growing Major Economy for Fourth Consecutive Year
The National Statistics Office (NSO) released its First Advance Estimate (FAE) of GDP for FY 2025-26 on January 7, 2026, projecting that India's Real GDP would grow at 7.4% in FY26, up from 6.5% in FY25. Nominal GDP growth was pegged at 8%. Real GDP was estimated to reach ₹201.90 lakh crore at 2011-12 constant prices. The growth was driven primarily by robust private final consumption expenditure (PFCE) — whose share in GDP rose to 61.5% — along with strong investment demand. Manufacturing sector growth recovered to 9% in Q2 FY26, after a sharp deceleration to 2.2% in Q2 FY25. Retail inflation declined sharply from 4.6% (FY25 average) to 1.7% during April–December 2025, reflecting easing food prices and improved supply chains. The data reaffirmed India as the world's fastest-growing major economy for the fourth consecutive year, surpassing China, the United States, and all G20 peers. India's foreign exchange reserves stood at approximately US$ 687 billion (₹61.96 lakh crore) as of early January 2026. The Economic Survey 2025-26, projected to be released in late January 2026, was expected to project FY27 growth at 6.8–7.2%. Key drivers identified include rising rural consumption (aided by good kharif output), government capital expenditure, declining interest rates following RBI rate cuts, and a favourable monsoon base effect. The FAE forms a key input for Union Budget 2026-27 planning, which was tabled on February 1, 2026.
Key facts
- NSO projected India's real GDP growth at 7.4% for FY26, up from 6.5% in FY25.
- Nominal GDP growth was estimated at 8% with real GDP reaching ₹201.90 lakh crore.
- Private final consumption expenditure (PFCE) share in GDP rose to 61.5%.
- Manufacturing growth recovered to 9% in Q2 FY26 from a 2.2% dip in Q2 FY25.
- Retail inflation dropped from 4.6% to 1.7% during April-December 2025.
- India continues as the fastest-growing major economy for the fourth consecutive year.
Mains angle
Q: Examine the key takeaways from the NSO's First Advance Estimate of GDP for FY 2025-26 and their implications for macroeconomic policy.
Answer (50 words):
Released 7-9 January 2026, the NSO First Advance Estimate projects India's real GDP growing 7.4 percent in FY26 versus 6.5 percent in FY25, reaching 201.90 lakh crore rupees; nominal growth pegged 8 percent, manufacturing recovering to 9 percent in Q2, retail inflation easing to 1.7 percent, reserves near 687 billion dollars.
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According to the First Advance Estimate released by the NSO around January 2026, what is the projected real GDP growth rate of India for FY 2025-26?
The NSO's First Advance Estimate projected real GDP growth at 7.4% in FY26, up from 6.5% in FY25, reaffirming India as the world's fastest-growing major economy for the fourth consecutive year.
Source: PIB / IBEF / Deloitte India Economic Outlook Jan 2026
Frequently asked questions
What real GDP growth rate did the NSO project for India in FY 2025-26?
The National Statistics Office (NSO) projected India's real GDP growth at 7.4% for FY 2025-26, up from 6.5% in FY25. The nominal GDP growth was estimated at 8%, with real GDP reaching ₹201.90 lakh crore at 2011-12 constant prices.
What is the First Advance Estimate (FAE) of GDP and when was it released for FY26?
The First Advance Estimate (FAE) is an early projection of national GDP released by the NSO before the fiscal year ends, used for budget planning. For FY 2025-26, the FAE was released on January 7, 2026, projecting 7.4% real GDP growth.
What was the share of Private Final Consumption Expenditure (PFCE) in India's GDP as per the FY26 FAE?
As per the First Advance Estimate, Private Final Consumption Expenditure (PFCE) accounted for 61.5% of India's GDP in FY26, reflecting robust domestic consumption as a key driver of economic growth.
How did India's manufacturing sector perform in Q2 FY26 compared to Q2 FY25?
India's manufacturing sector recovered strongly, growing at 9% in Q2 FY26 compared to a low of 2.2% in Q2 FY25. This recovery contributed significantly to India maintaining its position as the fastest-growing major economy.
For how many consecutive years has India been the fastest-growing major economy as of FY26?
As of FY 2025-26, India has been the fastest-growing major economy for four consecutive years. Retail inflation also declined from 4.6% to 1.7% during April–December 2025, supporting sustained economic growth.
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