India retains fastest-growing major economy, Q3 GDP rises to 7.8% under new series

India has reaffirmed its position as the world’s fastest-growing major economy, clocking a stronger-than-expected 7.8% GDP growth in Q3 FY26. The milestone comes with the release of GDP data under a revamped calculation series, offering a more accurate and globally aligned picture of economic performance. Full-year growth estimates for FY26 have also been revised upward to 7.6%.

India continued to outpace global peers in the third quarter of FY 2025–26, recording GDP growth of 7.8%, even as the period coincided with the first full quarter of 50% tariffs imposed during the administration of Donald Trump. The latest figures mark the first official GDP release under India’s new GDP series, which updates the base year and incorporates broader data sources to better capture economic activity.

What the New GDP Data Signals

Economists say the new series largely validates the growth trends seen under the previous methodology, while improving reliability and sectoral coverage.

Sujan Hajra, Chief Economist & Executive Director at Anand Rathi Group, noted that Q3 growth exceeded expectations and remained consistent across both old and new series. He added that private consumption and investment each grew above 7%, pointing to balanced demand-led expansion and a positive outlook for corporate earnings and market sentiment.

Key Methodological Changes

The revamped GDP series introduces several critical improvements:

Base year revised from 2011–12 to 2022–23

Reweighted sectors and demand components to reflect the current economy

Expanded use of GST data for net tax calculations

Improved informal sector estimates using granular enterprise surveys

Double deflation method for more accurate value-added calculations

Proportional Denton method to smooth quarterly revisions

These changes address long-standing concerns flagged by the International Monetary Fund, which had earlier rated India’s national accounts data in a lower reliability category due to the outdated base year.

Sectoral Performance

Manufacturing and services led the growth surge in Q3. According to Ranen Banerjee, Partner and Economic Advisory Leader at PwC India, manufacturing benefitted from strong GST collections, while services gained from festive-season demand and year-end travel. Agriculture growth appeared softer, which experts attribute partly to methodological changes rather than underlying weakness.

DK Srivastava, Chief Policy Advisor at EY India, said the revised methodology should improve India’s credibility under the IMF’s statistical assessment framework and bring national accounts closer to global SNA standards.

When Will India Become a Top Three Economy?

India’s growth momentum keeps it firmly on track to climb the global economic rankings. IMF projections earlier suggested India could overtake Japan to become the fourth-largest economy by FY26, though currency depreciation has affected dollar-based comparisons.

Chief Economic Adviser V. Anantha Nageswaran estimates India will cross the $4 trillion GDP mark in FY 2026–27 and is likely to become the third-largest economy by around 2029, depending on global growth trends and exchange rate movements.