Examine the factors driving India's GDP growth in 2025-26 and assess the sustainability of this growth trajectory.

India's real GDP grew 7.7% in 2025-26 as per the NSO's Provisional Estimates, up from 7.1% in FY25 [1]. The expansion is broad-based and domestically anchored, though its durability rests on converting cyclical supports into structural capacity.

Factors driving FY26 growth

• Manufacturing revival: the sector grew 10.7%, against 9.3% in FY25, outpacing overall GDP [1].
• Services rebound: contact-intensive services — trade, hotels, transport and communication — accelerated to 11% from 6.6% [1].
• Consumption stimulus: GST and income-tax rationalisation raised disposable incomes, powering the "double engine" of consumption and investment [2].
• Public capex and cheap energy: front-loaded government capital expenditure alongside softer crude oil prices eased input costs [2].
• Facilitative monetary conditions: with inflation subdued, the RBI's February 2026 MPC held rates and raised its FY26 growth projection to 7.4% [3].

Assessing sustainability — supportive signs

• Volume-led, not price-led: nominal growth of 8.9% against real 7.7% implies a low GDP deflator — output, not inflation, is doing the work [1].
• Near potential, not overheated: the Economic Survey 2025-26 pegs India's medium-term potential at ~7% and projects FY27 at 6.8–7.2%, indicating growth close to trend [2].
• Breadth across secondary and tertiary sectors reduces dependence on any single engine.

Concerns qualifying the trajectory

• Several drivers are one-off or cyclical — tax rationalisation and benign crude prices may not repeat.
• Estimates are provisional; the First Advance Estimates had placed growth at 7.4%/7.3% (GDP/GVA), and revisions are routine [5].
• The shift to the 2022-23 base year improves data quality but constrains comparability with the older series, complicating trend assessment [4].

The FY26 performance reflects genuine sectoral broadening rather than a statistical artefact, yet sustaining it requires shifting from consumption stimulus to durable private investment, productivity and job creation. If capex momentum and manufacturing gains hold, India can credibly maintain ~7% growth, advancing SDG-8's mandate of inclusive, sustained economic growth.