India Grows At 7.8% In Oct-Dec Quarter, Lower Than 8.4% In Q2

As per the first advance estimate, GDP for 2025-26 is estimated to touch 7.4%, largely driven by domestic demand. The latest Economic Survey indicated that India’s potential GDP is estimated to be around 7% and is estimated to grow in the range of 6.8-7.2% in the next financial year. The increase in trade and tariff uncertainty has posed a serious challenge for India. However, India remains one of the fastest-growing major economies in the world, despite global uncertainties.

One of the highlights is the growth in the manufacturing sector, with a change over the previous year going from 9.3% in 2024-25 to 11.5% in 2025-26. This will have a cascading effect on the economy, giving policymakers relief. 

Economic activity has remained robust in the third quarter, with strong rural consumption marked by farm and non-farm resilience. A recent report by the State Bank of India noted that, supported by fiscal stimulus, urban consumption has shown a consistent uptick since the last festive season. 

SBI pegged the GDP growth rate for the third quarter at 8.1%.

New Methodology

Meanwhile, India has revised its GDP base year from 2011-12 to 2022-23. This is the first series of growth data based on the new methodology, which will include GST and e-VAHAN records, among other things. Under the new series, the growth rate in the second quarter of the current financial year has been revised to 8.4% from the earlier 8.2%. For the first quarter, it has been revised downwards from 7.8% to 6.7%.

This revision will help in capturing the current economic dynamics, which include the increased digital commerce and service improvements. The SBI report also said that the overhaul includes better measurement of the informal sector and new data sources like GST, potentially placing India as the world's fourth-largest economy.

Economists added that India will now have to ensure that it maintains a growth rate close to a double-digit figure if it has to touch the Viksit Bharat status by 2047.

China’s economy has been slowing, too. In the October-December period in 2025, China’s economy expanded 4.5% year on year. In the July-September period, the country recorded a growth rate of 4.8%.