Strong Domestic Demand Keeps Growth Momentum Intact
New Delhi, February 24: India’s gross domestic product growth for the third quarter of FY26 is projected to be in the range of 8 to 8.1 percent, according to a report released by SBI Research on Tuesday. The report highlights that the domestic economy has sustained strong growth momentum despite ongoing global headwinds.High-frequency indicators for the October to December 2025 quarter suggest resilient economic activity across sectors. The data points to continued strength in both consumption and demand trends, supporting a robust expansion trajectory.
Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at State Bank of India, noted that rural consumption remains firm, backed by encouraging signals from farm and non-farm segments. Urban consumption has also registered a steady uptick since the last festive season, aided by fiscal stimulus measures.
FY26 Growth Estimated at 7.4% in First Advance Estimate
According to the First Advance Estimate, India’s GDP is expected to expand by 7.4 percent in FY26. The growth is largely being driven by domestic demand, reinforcing the resilience of the economy amid an uncertain global backdrop.The report underlines that internal demand dynamics have played a central role in sustaining economic expansion, even as external conditions remain volatile.
GDP Base Year Revision to 2022-23 on February 27
India is set to revise its GDP base year from 2011-12 to 2022-23, with the new data series scheduled for release on February 27. Alongside this, the Consumer Price Index base will be updated to 2024.The revision is aimed at aligning national accounts with the current economic structure, reflecting the growing importance of digital commerce and services. The updated framework is also expected to improve measurement of the informal sector by incorporating new and more comprehensive data sources.
The methodological overhaul will include granular inputs such as GST records, e-Vahan vehicle registration data, and natural gas consumption statistics. The use of these expanded datasets is expected to provide a more accurate representation of economic activity.
The report cautioned that, given the scale of methodological changes and the introduction of a new data series, it is difficult to anticipate the magnitude of any revisions to past estimates.
On February 27, the government will release the Second Advance Estimates of GDP for 2025-26, along with revised GDP figures for the previous three financial years and quarterly estimates based on the new 2022-23 base.
Economic Survey Projects Stable Medium-Term Growth
The latest Economic Survey estimates India’s potential GDP at around 7 percent. It projects growth in the range of 6.8 to 7.2 percent for FY27, indicating a stable medium-term outlook.Global Outlook Remains Uncertain
While India’s domestic economy shows resilience, the global environment continues to be marked by elevated uncertainty. Global growth is projected at 3.3 percent in both 2025 and 2026. However, performance across regions remains uneven due to geopolitical tensions, high debt levels, and structural transitions such as digitalization and decarbonization.Against this backdrop, India’s projected 8 to 8.1 percent growth in Q3 FY26 underscores the relative strength of its domestic demand-led expansion.
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