Mumbai: The Indian economy continues to register robust growth despite global challenges and geopolitical uncertainties, according to the latest bulletin released by the Reserve Bank of India (RBI) on Friday.
The report highlights that recent trade agreements with the European Union and the framework for an interim trade deal with the United States are expected to support India’s long-term growth momentum.
Controlled Inflation Supporting Economic Stability
RBI Governor Sanjay Malhotra stated that controlled inflation creates room to support economic growth while maintaining financial stability. He reaffirmed the central bank’s commitment to meeting the productive needs of the economy and sustaining growth momentum.
According to the bulletin, stable inflation conditions are providing a favourable macroeconomic environment for expansion.
GDP Growth Forecast at 7.4% for 2025–26
High-frequency economic indicators suggest continued strength in the third quarter of 2025–26 and beyond. The RBI projects real GDP growth at 7.4% for FY 2025–26, higher than the previous year.
Growth has been primarily driven by:
- Strong private consumption
- Sustained capital investment
However, net external demand remains weak as imports continue to outpace exports.
Services and Manufacturing to Drive GVA Growth
On the supply side, robust performance in the services sector and improving manufacturing activity are expected to push real Gross Value Added (GVA) growth to 7.3% in 2025–26.
The bulletin notes:
- Improved corporate sector performance
- Strengthening of the unorganised sector
- Continued resilience in construction activity
These factors are likely to support manufacturing expansion.
Agriculture and Rural Demand Provide Additional Support
Looking ahead to 2026–27, economic activity is expected to remain strong, supported by favourable agricultural conditions.
- Healthy reservoir levels
- Strong rabi sowing
- Improved crop outlook
These developments are expected to boost agricultural output and stabilise rural demand. Improvements in rural labour markets and sustained domestic consumption are likely to keep the services sector resilient.
Positive Outlook Amid Global Challenges
Despite global headwinds, India’s economic fundamentals remain solid, backed by stable inflation, resilient domestic demand and sectoral strength.
The RBI bulletin underscores that ongoing trade agreements, strong investment trends and agricultural stability position India for sustained medium-term growth.
