India is set to retain its position as the fastest-growing major economy in Financial Year 2026, supported by strong macroeconomic fundamentals, a resilient financial sector, and a focus on sustainable growth, according to a State Bank of India (SBI) report.
SBI estimates India’s GDP growth for Fiscal Year 25 at 6.5 percent, supported by a strong 7.4 percent growth in the fourth quarter. This growth was helped by a 9.4 percent rise in capital investment during the quarter. For the full year, capital formation went up by 7.1 percent. In the fourth quarter, the industry and services sectors grew by 6.5 percent and 7.3 percent respectively. The construction sector saw the highest growth in six quarters at 10.8 percent, while manufacturing grew by 4.8 percent. Private consumption increased by 7.2 percent during the year, and exports rose by 6.3 percent. However, imports dropped by 3.7 percent in Fiscal Year 25, with a sharp 12.7 percent fall in Quarter Four.
Dr. Soumya Kanti Ghosh, SBI’s Group Chief Economic Adviser, said that higher household savings will help support growth without causing inflation. He warned that global and geopolitical risks are still concerns for the future. Overall, almost all sectors showed stronger performance in the last quarter of Fiscal Year 25, giving a positive outlook for Fiscal Year 26.
