India’s Real GDP Growth Projected at 7.2% in Q4 FY26 on Strong Domestic Demand

India’s real GDP growth is expected to touch around 7.2 percent in the fourth quarter of FY26, reflecting the continued resilience of the domestic economy despite global uncertainty, according to an SBI report cited by The Economic Times. The report estimates that India’s full-year FY26 GDP growth is likely to settle at 7.5 percent, supported by steady consumption, rural demand and sustained economic activity.

The projection comes at a time when high-frequency indicators have shown some moderation in the March quarter, but the overall growth momentum remains intact. Rural consumption has been supported by both farm and non-farm activity, while urban demand has remained steady after the festive season, helped by fiscal support and improving household spending patterns.

On the nominal side, SBI expects India’s nominal GDP growth to be around 12.2 percent in Q4 FY26. For FY27, nominal GDP growth is estimated at about 11 percent, based on an assumed deflator of nearly 4.5 percent. These numbers suggest that India’s growth story is not only being driven by real activity but also by relatively firm nominal expansion.

However, the report also strikes a cautious note for the next financial year. SBI has projected real GDP growth of 6.6 percent for FY27, factoring in the possible impact of geopolitical disturbances, global supply-chain pressures and commodity-price volatility. The report said these numbers could be revised as more data becomes available.

The SBI outlook also points to global risks that could influence India’s macroeconomic path. Volatility in crude oil and other commodities, along with possible El Niño conditions, could create pressure on inflation. At the same time, robust rabi crop prospects may offer some comfort on the food-supply front, while the Reserve Bank of India is expected to actively manage liquidity conditions.

The broader takeaway is that India’s economy continues to stand on a strong domestic foundation even as the global environment remains uncertain. With consumption, rural demand and macroeconomic stability supporting growth, India is likely to remain one of the fastest-growing major economies, though FY27 may require careful policy management if external shocks intensify.