NEW DELHI: India's economy likely expanded 7.3% year-on-year in the January-March quarter (Q4FY26), slowing from 7.8% in the previous three months but remaining on a solid footing amid resilient domestic demand, government spending and improved agricultural activity, according to a Mint poll of 15 economists.
Economists in the poll expect GDP growth in the quarter to come in between 6.9% and 7.5%. If the poll projection holds, full-year FY26 growth would be 7.6%, matching the government's second advance estimate.
The data for the fourth quarter and full fiscal year will be released on 5 June.
The forecast suggests the Indian economy remained resilient in Q4 despite the escalation of the conflict in West Asia towards the end of the quarter, which pushed up crude oil prices and heightened global uncertainty. Economists, however, expect growth to moderate in FY27 as external risks persist.
“Demand-side indicators largely held up in the March quarter, providing resilience to the growth,” said Radhika Rao, economist at DBS Bank. She added that while cost pressures built up towards the end of the period, companies likely absorbed them by drawing down inventories rather than significantly scaling back production.
Dhiraj Nim, economist at ANZ Bank, said economic activity cooled somewhat in March, suggesting growth became less broad-based and more uneven, although government spending continued to support the economy.
Sectoral trends point to a mixed growth profile during the quarter. Economists expect slower expansion in the industrial and services sectors relative to the December quarter, which likely moderated overall GDP growth. However, a modest improvement in agricultural activity likely provided some support.
“A slower rise in manufacturing volumes, contraction in exports, and nascent signs of margin pressure amid the West Asia fallout may have weighed on the industrial gross value added (GVA) growth performance during the quarter,” said Aditi Nayar, chief economist at Icra Ltd.
Looking ahead, economists expect growth to moderate in FY27 as external risks persist. The conflict in West Asia is seen posing risks primarily through higher crude oil prices and their impact on inflation, consumption, trade balances and business costs. Uncertainty around the South-West monsoon could also weigh on agricultural output and rural demand.
Rajani Sinha, chief economist at CareEdge Ratings, said India’s GDP growth could moderate to around 6.7% in FY27 under a baseline scenario of crude oil averaging $90 a barrel. However, growth could slow closer to 6% if oil prices remain elevated at around $110 a barrel through the year.
Besides geopolitical risks, weather-related uncertainties remain a key factor. The India Meteorological Department's (IMD) latest projections point to rainfall deficiencies in some regions during the southwest monsoon season, which could weigh on agricultural output and, in turn, economic growth.