India’s economic growth outlook continues to remain buoyant, with strong domestic fundamentals prompting both global and local institutions to upgrade their projections, the government said on Tuesday.
India, with a GDP of $4.18 trillion, has overtaken Japan to become the world’s fourth-largest economy. The government said the country is on track to surpass Germany and move into the third position within the next 2.5 to 3 years, with GDP projected to rise to $7.3 trillion by 2030.
Reflecting this optimism, the Reserve Bank of India has raised its GDP growth forecast for FY26 to 7.3 percent from 6.8 percent earlier. Several international agencies have also revised their outlooks upward, citing India’s strong macroeconomic fundamentals.
The government described 2025 as a defining year for India’s growth trajectory, noting that the country remains among the fastest-growing major economies globally and is well placed to sustain this momentum in the coming years.
Economic growth touched a six-quarter high in the second quarter of FY26, highlighting India’s resilience despite persistent global trade and policy uncertainties. The expansion was largely driven by domestic factors, particularly robust private consumption.
India’s real GDP grew 8.2 percent in Q2 FY26, up from 7.8 percent in the previous quarter and 7.4 percent in the fourth quarter of FY25. Real gross value added (GVA) expanded by 8.1 percent, supported by strong performance in the industrial and services sectors.
The government said sustained international confidence, along with healthy domestic demand, declining unemployment and easing inflation, has created a favourable environment for long-term growth. These factors, it added, place India on a steady path towards achieving its development goals by 2047.
High-frequency indicators also point to continued economic activity. Inflation remains below the lower tolerance threshold, unemployment is on a downward trend, and export performance is showing steady improvement, the government said.