India’s GDP may grow 8.1% in Q3FY26 despite global headwinds: SBI report

Robust GDP Growth Projection Amid Global Challenges

India's economy appears set for a strong performance, with the State Bank of India forecasting an impressive 8.1% GDP growth for the third quarter of fiscal year 2026.

This projection comes even as the world grapples with trade disruptions and slowing demand elsewhere. The SBI report points to high-frequency indicators that signal steady momentum across various sectors. Rural areas are seeing solid consumption, bolstered by healthy farm and non-farm activities, while urban spending has picked up thanks to government fiscal measures and festive season boosts.

For the full FY26, the first advance estimates suggest a 7.4% overall growth, underscoring the role of domestic factors in keeping the engine running smoothly. This resilience stands out when many other nations are facing headwinds.

Key Drivers Fueling India's Economic Momentum

At the heart of this optimistic outlook is strong domestic demand, which has proven to be a reliable buffer against external pressures.

Rural consumption remains a standout, with positive trends in agriculture and related non-farm sectors providing steady support. Urban areas, meanwhile, are benefiting from consistent improvements in spending patterns, aided by timely fiscal stimulus and heightened activity during recent festivals.

The SBI analysis highlights how these elements are combining to push economic activity forward. Stable performance across industries further reinforces this picture, showing that India's growth story is well-diversified.

"Despite global headwinds, the Indian economy has maintained strong growth momentum, supported by resilient rural and urban consumption trends that are driving us closer to 8.1% GDP expansion in Q3FY26," noted the report.|quote|

Such domestic strengths are helping India navigate uncertainties that have tripped up other economies.

Upcoming Data Releases and Base Year Changes

Eyes are now turning to the second advance estimates of GDP for FY26, due out on February 27.

This release will include fresh data and incorporate revisions, potentially adjusting figures for earlier quarters. A significant shift is the update to the GDP base year from 2011-12 to 2022-23, aimed at better capturing the current economic landscape.

Alongside this, the Consumer Price Index base has been revised to 2024, promising more precise inflation tracking and policy insights. These methodological tweaks could refine how growth is measured moving forward.

In the first two quarters of FY26, growth was recorded at 7.8% and 8.2%, though these may shift with the new base. The economic survey had pegged FY26 around 7%, with FY27 in the 6.8-7.2% range, adding context to the SBI's bullish Q3 view.

India's prior year, FY25, saw 6.5% growth, setting a solid foundation for the current trajectory.

India's Edge in a Challenging World Economy

What makes this projection particularly noteworthy is India's ability to decouple from global slowdowns.

While trade tensions and weakening international demand pose risks worldwide, the country’s reduced reliance on exports and diversified sectoral contributions are paying off. Domestic consumption acts as the primary shield, keeping growth on track.

This pattern aligns with recent quarters where India has consistently outperformed many peers. The SBI report stresses that steady activity indicators point to sustained vigor.

As revisions loom, the focus remains on how these internal dynamisms will shape the final numbers. Policymakers will likely draw on this data for future strategies, ensuring the momentum holds.

Overall, the forecast paints a picture of an economy not just surviving but thriving amid adversity.

In summary, the SBI report's 8.1% Q3FY26 GDP growth projection highlights India's domestic-driven resilience, strong rural-urban consumption, and upcoming data revisions with a new base year, positioning the nation favorably despite global uncertainties.