India's economic momentum continues to surprise on the upside, with the chief economic advisor now projecting full-year growth of 7% or more for the current financial year. This upgraded forecast comes after official data revealed the economy expanded by a robust 8.2% in the September quarter, exceeding even the most optimistic expectations.
Upgraded Growth Projections
Chief Economic Advisor V. Anantha Nageswaran announced the revised outlook on Friday, representing a significant upgrade from previous estimates. The government's Economic Survey had projected real GDP growth between 6.3-6.8% back in February, while the Reserve Bank of India maintained its estimate at 6.8%.
Full year growth will be 7% or to the north of 7% rather than to the south of 7%, Nageswaran stated, emphasizing that the economy is positioned for stronger performance than initially anticipated.
Strong Quarterly Performance
The September quarter's impressive 8.2% GDP growth follows the 7.8% expansion recorded in the June quarter, bringing the first half growth to a solid 8%. Nageswaran described this performance as outside the range of most optimistic estimates and highlighted that India continues to outpace other major economies.
For comparison, Indonesia expanded by 5% and China grew by 4.8% during the same September quarter, underscoring India's relative economic strength amid global challenges.
Policy Reforms Driving Growth
The economic revival reflects the cumulative effect of structural reforms implemented since the government returned to office in June 2024. Key measures include the significant direct tax relief introduced in the February budget and the employment-linked incentive schemes announced and implemented since the July 2024 budget.
Prime Minister Narendra Modi described the 8.2% growth figure as very encouraging in a social media post, noting that it reflects the impact of pro-growth policies and reforms while crediting the hard work and enterprise of Indian citizens.
Domestic Strength Amid Global Uncertainty
Nageswaran emphasized that steady domestic drivers continue to underpin growth despite softening global conditions. The confluence of stable inflation, sustained public capex, and reform momentum positions the economy to withstand external risks, including potential trade impacts from US tariffs.
Growth momentum is firming, driven by robust expansion in manufacturing and services, supported by festive demand and GST-led gains, Nageswaran stated in his presentation. He added that core inflation remains stable while timely Rabi sowing and healthy reservoir levels reinforce a benign food supply outlook.
Positive Economic Indicators
Several indicators point to sustained economic strength. The cumulative GST collection growth of 9% for the April to October period of 2025 indicates resilient revenue streams, aided by firm consumption and improved compliance.
Looking ahead, improving price dynamics and tax reforms are expected to boost household disposable incomes, strengthening the near-term consumption outlook. Healthy corporate sector balance sheets also augur well for sustained private investments in the second half of FY26.
Nageswaran concluded that India remains an important market for other countries, with its high consumption share supporting global growth through continued imports, while the economy remains anchored in financial stability, macroeconomic stability and fiscal prudence.
