India GDP growth was estimated at 7.35% in the second quarter of fiscal year 2026–27, the finance ministry said in its monthly economic report on October 29, 2026. The estimate follows actual real GDP growth of 7.8% in the first quarter.

Key Takeaways

  • The ministry’s nowcasting model points to slower real growth in Q2 than the 7.8% recorded in Q1.
  • The ministry identified oil prices, food supply and shipping disruptions as inflation risks.
  • Foreign exchange reserves provided 10.3 months of import cover, the ministry said.

India GDP growth estimate and forecasts

The finance ministry attributed the Q2 estimate to indicators including industrial output, energy consumption, port traffic, goods and services tax collections and automobile sales. Its nowcasting model was introduced in the Economic Survey 2025–26.

A nowcast is an estimate rather than a completed GDP result. The International Monetary Fund forecasts Indian growth of 7.0% for the full FY27 fiscal year, while the World Bank, OECD and Reserve Bank of India each project 7.1%. Those annual forecasts are not directly comparable with the ministry’s quarterly estimate.

Inflation and external risks

The ministry said domestic food supplies, global energy volatility and liquidity conditions would shape near-term inflation. It identified risks from an intensifying El Niño during the upcoming Rabi sowing season, festive demand, elevated crude prices and shipping disruptions along West Asian routes.

The report said the effectiveness of the recent rate hike in containing secondary inflation effects would depend on the RBI’s liquidity management. The RBI’s explanation of how interest rates affect inflation describes the general monetary-policy mechanism; it does not assess the recent hike.

The ministry also said merchandise export growth and a steady services surplus had cushioned the trade balance, while capital inflows, particularly banking capital, financed the wider current account deficit during April–August FY27. It described reserves as adequate by standard measures despite continuing pressure on the rupee.

Read More News

More FinanceVelix news

Disclaimer

This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.