Economic Survey 2025-26 key highlights: GDP growth pegged at 7.4%, inflation at historic lows; banks and exports strengthen amid tariffs

India is set to remain the world’s fastest-growing major economy, with real GDP growth projected at 7.4% in FY26, even as the global environment remains fragile due to geopolitical tensions, trade fragmentation and financial vulnerabilities, according to the Economic Survey 2025–26.

Tabled in Parliament by Union finance minister Nirmala Sitharaman, the survey said India’s macroeconomic fundamentals have strengthened on the back of robust domestic demand, disciplined fiscal consolidation and improving financial sector health, while highlighting the need for strategic resilience as the global order undergoes rapid change.




The survey projects India’s potential growth at around 7%, supported by rising investment, stable inflation, improving balance sheets and structural reforms across manufacturing, infrastructure, services and the financial system.

Economic Survey 2025–26: Top highlights

• Growth outlook strong: Real GDP growth is projected at 7.4% in FY26 and 6.8–7.2% in FY27, with GVA growth estimated at 7.3% in FY26, reaffirming India’s position as the fastest-growing major economy for the fourth straight year.
• Consumption and investment drive momentum: Private consumption rose 7% in FY26, accounting for 61.5% of GDP, while gross fixed capital formation grew 7.8%, with investment holding steady at 30% of GDP, led by public capex and a revival in private investment.
• Services power the economy: Services GVA grew 9.3% in H1 FY26 and is estimated to rise 9.1% for the full year, underlining broad-based expansion in modern and tradable services.
• Fiscal consolidation strengthens credibility: Centre’s revenue receipts rose to 9.2% of GDP in FY25, aided by buoyant tax collections, while India secured three sovereign credit rating upgrades in 2025.
• Tax base and GST collections expand: Income tax return filings increased from 6.9 crore in FY22 to 9.2 crore in FY25. Gross GST collections during April–December 2025 stood at Rs 17.4 lakh crore, up 6.7% year-on-year.
• Banking sector at multi-decade health highs: Gross NPAs fell to a multi-decade low of 2.2% in September 2025, while credit growth accelerated to 14.5% year-on-year by December 2025.
• Financial inclusion and investor participation deepen: Over 55 crore Jan Dhan accounts have been opened, while the number of unique investors crossed 12 crore in September 2025, with nearly 25% women.
• External sector resilience improves: India’s share of global merchandise exports nearly doubled to 1.8%, services exports hit a record $387.6 billion, and remittances touched $135.4 billion in FY25. Forex reserves rose to $701.4 billion, covering 11 months of imports.
• Inflation at historic lows: Headline CPI inflation averaged just 1.7% during April–December 2025, the lowest since the CPI series began, driven by food and fuel price moderation.
• Manufacturing and PLI show structural recovery: Manufacturing GVA grew 7.72% in Q1 and 9.13% in Q2 FY26. PLI schemes across 14 sectors attracted over Rs 2 lakh crore of investment, generating 12.6 lakh jobs.
• Infrastructure and connectivity surge: High-speed corridors expanded nearly ten-fold to 5,364 km, airports increased from 74 in 2014 to 164 in 2025, and India emerged as the world’s third-largest domestic aviation market.
• Survey pitches ‘disciplined swadeshi’: The survey proposes a three-tier strategy moving from self-reliance to strategic indispensability, focusing on critical capabilities, cost competitiveness and advanced manufacturing to strengthen long-term resilience.