India’s economic expansion likely moderated in the January-March 2026 quarter, with GDP growth forecast at a median 7.2% year-on-year, according to a poll of 45 economists conducted between May 22 and June 1. That reading would mark a decline from the 7.8% pace recorded in the previous quarter.
The poll showed a range of estimates from 6.1% to 7.7%, and also produced an estimate for gross value added, or GVA, of 7.3% based on a smaller subset of forecasters. The official GDP print is scheduled for release at 1030 GMT on Friday, June 5. This release will be the second quarterly estimate under India’s updated national accounts series, which shifted the GDP base year to 2022/23 from 2011/12 and revised components of the estimation methodology in February.
Economists attributed the slowdown largely to a deterioration in external demand and softer industrial activity, which offset continued strength in public investment and a modest improvement in agriculture.
"Underlying drivers suggest a transition from broad-based expansion to a more uneven growth profile. Government spending likely maintained a healthy pace of growth...(while) external demand weakened amid global disruptions," said Dhiraj Nim, economist at ANZ.
Nim noted that manufacturing volumes appeared to be easing and that export weakness, along with margin pressures, likely weighed on industrial output. Agriculture, by contrast, provided some support to overall growth through a slight uptick in performance.
"Services growth is expected to remain strong, supported by a continued acceleration of credit growth and higher GST collections. In contrast, manufacturing growth is likely to be more subdued," said Sajjid Chinoy, chief India economist at J.P. Morgan.
Several external shocks have contributed to the pressures on India’s growth profile, including higher U.S. tariffs on Indian goods and the U.S.-Israeli war with Iran that drove crude oil prices sharply higher. While these shocks have not displaced India’s position as the fastest-growing large economy globally, they have added to uncertainty and weighed on private investment activity.
That weakness in private investment is notable because economists say it is important for generating well-paying jobs for the large number of people entering India’s labour force each year. With private capital spending subdued, government capital expenditure has had to carry a greater share of the growth burden.
Looking beyond the quarter, the poll reflected a cautious medium-term outlook. Economists surveyed expect GDP growth to slow to 6.5% in the current quarter, average 6.7% over the current fiscal year, and then rise to 6.9% in the following fiscal year.
Market participants will be watching the Reserve Bank of India’s upcoming monetary policy decision closely. Nearly 80% of economists in the poll anticipated the central bank would keep the policy repo rate unchanged at 5.25%. However, most respondents also expected at least one rate hike by the end of 2026.
The incoming GDP numbers, together with central bank guidance and evolving global developments, will shape expectations for private sector hiring, investment decisions, and corporate margin pressures across manufacturing and export-oriented sectors. Observers will also gauge whether the combination of government spending and an improved agricultural showing is sufficient to sustain momentum amid an uncertain global backdrop.