India's GDP Growth Reaches 7.8% in Q3 2025-26 Amid Methodology Changes

India's Economic Performance in Q3 2025-26

In the third quarter of the fiscal year 2025-26, India's gross domestic product (GDP) experienced a growth of 7.8%, an increase from 7.4% during the same quarter the previous year. This growth is attributed to a revised calculation methodology, which includes a new base year of 2022-23, as announced by the Ministry of Statistics and Programme Implementation (MoSPI). This marks the ninth revision of the GDP series.

The upward trend in GDP is primarily fueled by advancements in the manufacturing and services sectors. Additionally, the GDP growth for the second quarter has been adjusted to 8.4%, up from 8.2% in the earlier series based on the 2011-12 base year. Conversely, the first quarter's growth has been revised down to 6.7% from 7.8%.

MoSPI reported that the real GDP is projected to reach Rs 322.58 lakh crore for FY 2025-26, compared to the First Revised Estimate (FRE) of Rs 299.89 lakh crore for FY 2024-25. The anticipated growth rate for real GDP in 2025-26 stands at 7.6%, an increase from 7.1% in 2024-25.

The new series includes the 'Second Advance Estimates of Annual GDP for FY 2025-26' and 'Quarterly Estimates of GDP from Q1 (April-June) of FY 2022-23 to Q3 (October-December) of FY 2025-26.' For the fiscal year 2025-26, nominal GDP is expected to grow by 8.6%. The economy has shown consistent performance, with real GDP growth rates of 7.2% and 7.1% recorded in 2023-24 and 2024-25, respectively. Nominal GDP growth rates were 11% and 9.7% during the same periods.

According to MoSPI, the manufacturing sector has been a significant contributor to the economy's robust performance over the past three financial years following the rebasing. This sector has achieved double-digit growth rates in both 2023-24 and 2025-26. Furthermore, the Trade, Repair, Hotels, Transport, Communication, and Broadcasting sectors have also reported a growth rate of 10.1% at constant prices for 2025-26.

On the consumption front, both Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) have shown growth rates exceeding 7% in 2025-26. MoSPI also indicated that the new series will implement double deflation in the manufacturing and agriculture sectors, while single extrapolation will be applied elsewhere.