Chief Economic Advisor V Anantha Nageswaran raised India’s GDP growth forecast for the financial year 2026-27 to 7-7.4 percent, up from the earlier projection of 6.8-7.2 percent made during the Economic Survey presentation in January, citing strong economic momentum, a landmark trade framework with the United States, and robust high-frequency indicators across key sectors.
Addressing a press conference following the release of the revised GDP series on Friday, the CEA expressed confidence that the risk to the new forecast range was tilted to the upside. He cautioned, however, that global uncertainties remained an external risk factor.
India has recorded three consecutive years of GDP growth exceeding 7 percent, the CEA noted. For the current financial year 2025-26, with the first three quarters posting growth rates of 8.4 percent and 7.8 percent, the fourth quarter would need to deliver over 7 percent growth to meet the full-year target of 7.6 percent—a threshold Nageswaran expressed confidence the economy would meet, pointing to resilient high-frequency data through January 2026.
On the demand side, the CEA highlighted a notable pickup in rural consumption, evidenced by domestic tractor sales at 43 percent what he described as “mind-boggling” growth numbers, while urban consumption was also recovering, supported by direct and indirect tax relief provided during the year. UPI transaction volumes grew 27.7 percent, while domestic passenger vehicle sales and air passenger traffic both showed stronger momentum in January.
On the supply side, manufacturing sector growth remained in double digits at 11.5 percent, while services grew at 9.5 percent in gross value added terms. India’s gross fixed capital formation continued to hold above 30 percent share of GDP, which Nageswaran called a “respectable and creditable achievement” given global excess capacity and uncertainty.
The CEA also noted that post Covid the highlight of the Indian economy has been “sustained, non-inflationary or moderate inflation growth”, which is expected to continue in 2026-27.
Noting that while the nominal GDP figure was revised downward by approximately Rs 12 lakh crore in FY26 (new series), pushing the estimated fiscal deficit for FY26 to 4.5 percent of GDP, other fiscal indicators including the primary deficit, revenue deficit, and capital expenditure ratios remained broadly unchanged, leaving the government’s fiscal consolidation path intact.
“The GDP revisions do not alter the fiscal trajectory that the Union government is on at this point and improve policy certainty resulting from successful trade agreements, including the India-US framework deal and the India-EU trade agreement,” Nageswaran said adding that this will support exports and also stabilise capital flows going forward, which at the gross level, have actually been “improving in terms of FDI numbers”.
He added that India’s relatively limited AI exposure in its capital markets, once seen as a disadvantage, could prove to be a tailwind for capital inflows in 2026 as global investors reassess AI-heavy portfolios.
First Published: Feb 28, 2026, 11:45
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