India’s economy grew at 7.8% in the third quarter of the fiscal year 2025-26 (October to December 2025), exceeding the median poll estimate of 7.4%, according to data released by the Ministry of Statistics and Programme Implementation. The figure builds on an 8.2% growth rate recorded in Q2, bringing the first-half FY26 average to approximately 8.0%.
The Ministry’s release attributed Q3 growth to strong performance in the manufacturing sector, which expanded at 7.7%, and the tertiary or services sector, which grew at 9.3%, with trade, hotels, and transport recording double-digit growth within the services category, according to the research documents. Construction grew at 7.6%. Agriculture and allied activities grew at a more modest 3.7%, while the mining and quarrying sector contracted by 3.1% and electricity and utilities grew by just 0.5%, according to the same sources.
The full-year FY26 GDP growth forecast has been raised to 7.6%, according to Economic Times and PIB-attributed reporting cited in the research documents. Separately, the research documents note a full-year projection range of 7.0% to 7.5% from other analyst estimates. This divergence reflects ongoing debate about the strength of the second half of the fiscal year, which will need to absorb the economic impact of the ongoing West Asia conflict.
Deflator Effect
Analysts have flagged a methodological consideration in interpreting the headline figures. According to the research documents, exceptionally low wholesale price inflation has resulted in a “weak deflator,” which may have mechanically elevated the reported real GDP growth rate. In Q2 FY26, while real GDP growth was reported at 8.2%, nominal GDP growth stood at 8.7% — a relatively narrow gap that some analysts interpret as reflecting soft economic conditions in current price terms rather than a robust expansion. This caveat is attributed to analyst commentary in the research compilation and does not reflect a revision to official government statistics.
India maintains its position as the fastest-growing major economy globally at this growth rate, according to available international comparisons.
