India’s GDP Growth Projected at 7.6% in First Half of FY26
India’s economy is set for robust growth with GDP expected to reach 7.6% in the first half of FY26, significantly higher than the 6.1% recorded during the same period last year, according to an ICICI report.
Key Takeaways
- H1 FY26 GDP growth projected at 7.6% vs 6.1% in H1 FY25
- Q2 FY26 real GDP estimated at 7.5% with GVA at 7.3%
- Full-year FY26 growth forecast at 7.0%, FY27 at 6.5%
- Manufacturing and services sectors driving expansion
Strong Economic Momentum Continues
Economic activity has remained strong through the first two quarters, supported by robust manufacturing, services performance, and continued government spending. The report states: “India’s GDP growth in H1FY26 is now estimated at 7.6 per cent YoY compared with 6.1 per cent YoY in H1FY25”.
Second Quarter Performance
For the July-September quarter, India’s real GDP is expected to grow at 7.5% year-on-year, while Gross Value Added growth is estimated at 7.3%. This expansion is primarily driven by manufacturing and services sectors, with front-loaded government expenditure and buoyant goods exports providing additional support.
Moderating Growth in Second Half
While growth momentum in H2 FY26 may moderate to 6.4% due to lower exports and slowing government capital expenditure, overall consumption is likely to remain resilient. The Centre has fiscal room to maintain spending through divestments and additional resource mobilization.
Consumption Patterns and Outlook
The GST rate reduction announced during Q2 had a temporary impact on consumption demand, with some consumer spending deferred to Q3 as reflected in improved retail sales. India’s growth outlook remains strong, supported by broad-based economic activity and resilient domestic demand, though external headwinds may weigh slightly on future growth.
