India’s economy is not stopping at becoming the 4th largest in the world. On 6th February 2026, the Reserve Bank of India (RBI) revised the GDP growth forecast for the ongoing financial year to 7.4 percent from 7.3 percent earlier.

RBI governor Sanjay Malhotra said the Indian economy remained robust and resilient despite heightened geopolitical tensions and elevated uncertainty. India showed strong growth and low inflation.

RBI says that first advance estimates suggest ongoing momentum, driven by private consumption and fixed investment, even as net external demand remained a drag due to imports outpacing exports. On the supply side, growth in real GVA, led by a strong services sector and a revival in manufacturing, is estimated at 7.3 percent in FY26. Looking ahead to FY27, economic activity is expected to remain firm.

Agriculture will benefit from healthy reservoir levels, robust rabi sowing, and improved crop conditions. Manufacturing and construction sectors should see sustained growth, aided by improving corporate performance, high capacity utilization, and government infrastructure push. On the demand side, private consumption is expected to stay strong, with rural demand supported by a buoyant agricultural sector and improving labor market conditions, while urban demand benefits from GST rationalization and monetary easing.

The recently concluded India-EU free trade agreement (FTA), followed by the prospective India-US trade deal and other trade arrangements, is expected to support exports over the medium term. Services exports are likely to remain resilient.

The RBI’s monetary policy committee held rates steady, citing benign inflation and easing concerns over US tariffs following trade agreements.