India’s FY26 GDP seen rising 7% on strong H1 performance: India is on track for a robust economic expansion — the domestic economy is projected to grow by around 7.0% in fiscal year 2025–26 (FY26), according to a new report by ICICI.
The report highlights a strong first half (H1 FY26), with GDP growth estimated at 7.6% year-on-year, up markedly from 6.1% in H1 of the previous fiscal year. Economic momentum through the first two quarters has been driven by healthy growth in both manufacturing and services sectors, alongside sustained government spending.
For Q2 (July–September), real GDP growth is expected to reach about 7.5%, with Gross Value Added (GVA) rising an estimated 7.3%, reflecting expansion across industry and services, boosted by front-loaded government expenditure and strong goods exports.
However, ICICI warns growth might ease in H2 FY26 — projecting a slowdown to roughly 6.4% in the second half. This moderation is attributed to weaker exports and a slowdown in government capital expenditure Still, resilient private consumption and fiscal flexibility (supported by possible divestments or resource mobilization) are expected to keep overall growth healthy.
Overall, with strong performance in H1 and steady domestic demand, India’s FY26 economic outlook remains positive and broad-based, despite potential headwinds from external demand and government spending patterns.
