Female labour force participation is up. Inclusivity accompanying broad based growth.

Healthy banking fundamentals and stronger credit momentum.

External resilience strengthens as buffers build. External debt is now down to 19.2%. No warning signals on the external front, said CEA.

The Economic Survey 2025–26 highlights that while artificial intelligence (AI) presents significant opportunities for India’s services exports and innovation ecosystem, its implementation comes with substantial challenges and risks. The Survey notes that globally, leveraged AI investments and speculative capital deployment pose potential threats to financial stability, even as AI adoption accelerates.

CEA V. Anantha Nageswaran said focus on manufacturing in fragmented world is the key message of the Economic Survey. India an oasis of macro stability amid turbulent world.

India is tracking 7.4% real GDP growth in FY2, while we expect it to be slightly higher at 7.5% to 7.9%, but what is interesting to note that the next year fiscal growth is pegged at 6.8% to 7.2%, said Rumki Majumdar, Economist, Deloitte India. Clearly, there is a lot of confidence that growth is resilient and is expected to remain so and India is becoming structurally self-propelled via domestic demand, public capex and reform compounding, even as external buffers are prioritised. "The Economic Survey 2025-26 places India’s medium-term growth potential at 7%, noting that while investment has lagged in recent years, a gradual firming of investment cycle which is now visible through high frequency indicators with improving credit conditions, above-trend capacity utilisation, and sustained strength in capital goods activity."

India’s inflation outlook remains favourable, with price pressures expected to stay within the Reserve Bank of India’s tolerance band, even as global uncertainties, currency fluctuations and volatility in metal prices continue to pose risks, the Economic Survey 2025–26 said.

Agriculture and allied activities continue to play a pivotal role in India’s growth story, contributing nearly one-fifth of national income at current prices while employing 46.1% of the workforce, the Economic Survey for FY26 said on Thursday. The survey underlined that strengthening farm-sector performance remains critical for inclusive growth and food security, given the sector’s outsized role in employment. 

Artificial intelligence (AI) is increasingly shaping global services trade, particularly digitally deliverable services. Emerging evidence suggests a two-way relationship between AI innovation and trade: advances in AI reduce trade costs and increase productivity, while increased cross-border services trade, in turn, accelerates technological diffusion. 

The WTO estimates that AI could raise global trade by 34-37% by 2040, with digitally deliverable services expanding by about 42%, driven by lower trade costs and higher productivity. Conversely, a 10% increase in digitally deliverable services trade is associated with a 2.6% rise in cross-border AI patent citations across borders, underscoring the mutually reinforcing nature of trade and AI-driven innovation.

Policy must move faster to reshape India’s fast-expanding gig economy, with a sharper focus on competition, worker protections and minimum earnings, the Economic Survey 2026 tabled by finance minister Nirmala Sitharaman in Parliament today said, arguing that digital platforms have become critical labour-market infrastructure with disproportionate control over workers’ incomes and conditions.

“Policy should address this through competition rules, data access, and algorithmic transparency, while reorganising the social contract so that gig work benefits workers more fairly,” the Survey said, warning that unchecked platform dominance risks widening income insecurity.

Inflation outlook remains favourable, with projections staying within target ranges, supported by strong agricultural output, stable global commodity prices, and continued policy vigilance. However, risks from currency fluctuations, base metal price surges and global uncertainties persist, warranting ongoing monitoring and adaptive policy responses.

Economic Survey 2025-26 has suggested a multi-pronged strategy to strengthen India’s investment climate and sustain the country’s foreign direct investment (FDI) inflows.

In an environment of heightened global volatility, the strategy should address both structural and cyclical factors that determine capital flows, the Survey said. “India’s task to attract FDI is even more complex, as it is not just competing with the world's current largest exporter for shifting global value chains (GVCs) to India, but also with emerging FDI destinations”, it said.

In his closing remarks of the Preface in the Survey, V. Anantha Nageswaran, chief economic advisor, mentions that the economy retains momentum, and growth is likely to be sustained into FY27. The chapter also introduces our nowcasting model, which integrates high-frequency indicators to assess growth in the ongoing and subsequent quarters. After three years of operational use and validation, the model has matured into a reliable tool for monitoring near-term macroeconomic conditions in real time, states Nageswaran.

The chapter also introduces our nowcasting model, which integrates high-frequency indicators to assess growth in the ongoing and subsequent quarters. After three years of operational use and validation, the model has matured into a reliable tool for monitoring near-term macroeconomic conditions in real time, states Nageswaran.

Government initiatives have played a key role in accelerating structural transformation, particularly in electric mobility, the Economic Survey 2025-26 said. The PLI scheme for automobiles and auto components has attracted ₹35,657 crore in cumulative investments and generated nearly 49,000 jobs as of September 2025, while the PLI ACC battery scheme is helping localise advanced battery manufacturing and strengthen the EV ecosystem.

Overall, the Economic Survey concluded that policy continuity, demand resilience and global integration position the automotive sector as a central pillar of India’s manufacturing and export strategy.

The Economic Survey highlighted strong export performance, noting that over 5.3 million vehicles were exported in FY25 across passenger, commercial, two-wheeler and three-wheeler segments. Export momentum has continued into FY26, with double-digit growth recorded in the first half of the year, reflecting growing global acceptance of India-made vehicles.

On the production front, the Survey said the automotive industry recorded nearly 33% growth over the last decade (FY15–FY25), supported by post-pandemic demand recovery and policy-led incentives.

The automotive industry remains a critical driver of economic growth, employment and fiscal revenues, the Economic Survey 2025-26 said. India is the world’s largest market for two-wheelers and three-wheelers, and the third-largest globally for passenger vehicles (PV) and commercial vehicles (CV).

Supported by a vast manufacturing and auto component ecosystem, the sector provides direct and indirect employment to over 30 million people and contributes nearly 15 per cent of India’s GST collections, underlining its importance to public finances, according to the Survey.

India’s economic momentum remained firm in the third quarter of FY26, with high-frequency indicators pointing to sustained demand across both urban and rural segments, according to the Economic Survey 2025-26. The Survey noted that automobile and tractor sales, along with air passenger traffic, continued to signal robust consumption conditions during the period.

Citing the November 2025 round of the NABARD Rural Economic Conditions and Sentiments Survey, the Economic Survey said 79.2% of rural households reported higher consumption over the past year, with the share of monthly income spent on consumption rising to around 67%, the highest since the survey’s inception. The Survey attributed this trend to GST rate rationalisation and softer inflation, which have improved real purchasing power, particularly for rural non-farm incomes.

Looking ahead, while global uncertainties remain elevated, domestic growth drivers are expected to continue supporting economic activity. With macroeconomic stability in place and ongoing reform efforts, the economy appears well-positioned to sustain growth in the near term. The outlook for FY27 is shaped by these domestic strengths, alongside evolving external conditions. The chapter concludes that India’s medium-term growth potential has strengthened to 7 per cent, positioning the economy on a path of steady expansion amid global uncertainty.

Inflation has moderated, financial sector balance sheets remain healthy, and fiscal policy continues to strike a balance between supporting growth and consolidation. The external sector remains manageable, supported by services exports and adequate foreign exchange reserves.

Against this backdrop, the Indian economy has maintained strong growth momentum in FY26. The First Advance Estimates place real GDP growth at 7.4 per cent, with growth largely driven by domestic demand. Private consumption and capital formation continue to support expansion, while services remain the key contributor on the supply side. Manufacturing activity has strengthened, and agriculture has provided stability, notwithstanding structural constraints.

The global economic environment remains uncertain, shaped by geopolitical tensions, trade disruptions, and divergent growth and inflation outcomes across major economies. While global activity has shown resilience in the near term, underlying vulnerabilities persist, including elevated fiscal pressures, fragmented supply chains, and an increased reliance on economic policy instruments for strategic purposes.

The automotive industry is a significant driver of economic growth, with India established as the world’s largest market for Two-Wheelers and Three-Wheelers and the third-largest market globally for Passenger Vehicles (PV) and Commercial Vehicles (CV). Supported by a vast manufacturing and auto component ecosystem, the sector provides direct and indirect employment to over 30 million people and contributes significantly to public finances, accounting for nearly 15% of the country’s GST collections.

The industry is also witnessing tremendous growth in exports, with more than 5.3 million vehicles shipped across Passenger, Commercial, Two-Wheeler, and Three-wheeler segments in the FY25 and posting double-digit growth in the H1 of 2025-26, reflecting rising global acceptance of India-made vehicles. Overall, the industry has 18 Ministry of Heavy Industries.

Economic Survey 2025-26 has suggested a multi-pronged strategy to strengthen India’s investment climate and sustain the country’s foreign direct investment (FDI) inflows.

In an environment of heightened global volatility, the strategy should address both structural and cyclical factors that determine capital flows, the Survey said. “India’s task to attract FDI is even more complex, as it is not just competing with the world's current largest exporter for shifting global value chains (GVCs) to India, but also with emerging FDI destinations”, it said.

Even against a backdrop of heightened global trade tensions and tariff pressures, India’s external sector remained resilient, with total exports of goods and services touching a record $825.3 billion in FY25 and maintaining momentum into FY26, the Economic Survey 2026 said on Thursday.

Despite higher tariffs imposed by the United States, merchandise exports grew 2.4% during April–December 2025, while services exports rose a stronger 6.5%, underscoring the economy’s growing reliance on services as a key external buffer. Merchandise imports increased by 5.9% in the same period, leading to a wider goods trade deficit, which was largely offset by a higher services trade surplus and robust remittance inflows.

The Survey noted that remittances have consistently exceeded gross FDI inflows, reinforcing their importance as a stable source of external financing. As a result, India’s current account deficit remained moderate at 0.8% of GDP in H1 FY26, despite global headwinds.

On the trade front, India’s total exports reached record levels of $825.3 billion in FY25 and $418.5 billion in H1 FY26, driven by strong growth in services exports and sustained momentum in non-petroleum, non-gems, and jewellery exports. The expansion of higher-value manufacturing exports, especially in electronics, pharmaceuticals, and electrical machinery, along with diversification of export destinations and import sources, has strengthened resilience amid rising protectionism and tariff uncertainties.

Agriculture and allied activities contribute nearly one-fifth of India’s national income at current prices, but account for 46.1% of the country’s workforce. Given the relatively large share of employment in agriculture and allied activities, the sector remains central to India’s overall growth trajectory. Strengthening agricultural performance is therefore important for inclusive growth and ensuring food security.

India’s agriculture sector has shown robust growth in recent years. Given the large proportion of the population supported by the sector and its crucial role in food security, sustained agricultural growth is imperative for strengthening economic resilience, promoting rural prosperity, and ensuring food security. Government initiatives such as the Pradhan Mantri Krishi Sinchai Yojana (PMKSY), Rashtriya Krishi Vikas Yojana (RKVY), Agriculture Infrastructure Fund (AIF), and Kisan Credit Cards (KCC), have helped enhance agricultural productivity, encourage crop diversification and increase farm incomes. Additionally, the buoyant growth of allied sectors has positively contributed to agricultural performance.

India’s external sector has evolved amidst a global environment characterised by heightened trade policy uncertainty, geopolitical realignments, and a structural shift away from a hyper-globalisation phase. The reconfiguration of global trade and investment flows, increasingly influenced by considerations of national security, technological sovereignty, and strategic autonomy, has introduced both new constraints and opportunities for emerging economies. 

In this changing environment, India’s external performance demonstrates resilience to global shocks and highlights the structural characteristics associated with a rapidly growing economy that is integrating more deeply into global markets.

Cumulative impact of policy reforms over recent years appears to have lifted the economy’s medium-term growth potential closer to 7 per cent. With domestic drivers playing a dominant role and macroeconomic stability well anchored, the balance of risks around growth remains broadly even. Taking these considerations together, the Economic Survey projects real GDP growth in FY27 in the range of 6.8 to 7.2 per cent. The outlook, therefore, is one of steady growth amid global uncertainty, requiring caution, but not pessimism," it added. 

Domestic economy remains on a stable footing. Inflation has moderated to historically low levels, although some firming is expected to occur going forward. Balance sheets across households, firms and banks are healthier, and public investment continues to support activity. Consumption demand remains resilient, and private investment intentions are improving," the Economic Survey said.  

"These conditions provide resilience against external shocks and support the continuation of growth momentum. The forthcoming rebasing of the CPI series in the coming year will also have implications for inflation assessment and warrant careful interpretation of price dynamics," it added.  

Finance Minister Nirmala Sitharaman tabled the Economic Survey 2025-26 in the Lok Sabha.

As Finance Minister Nirmala Sitharaman tables the Economic Survey 2026 in Parliament today, attention is on whether last year’s India-Pakistan conflict had any material impact on the economy. 

Industry experts believe the impact is likely to be negligible, given minimal bilateral trade and India’s diversified, resilient economic base. The Reserve Bank of India (RBI) has also downplayed macroeconomic risks arising from the tensions. That said, it is anticipated that both Economic Survey and the budget will have a take on the defence sector of the economy. Defence indigenization is likely to receive a major thrust. Will the Survey lay down policy framework for the same?  

Meanwhile, RBI Governor Sanjay Malhotra had said the conflict with Pakistan last year had a “very, very limited, negligible impact” on overall economic activity and growth. While there was some short-term disruption—particularly in northern India due to airport closures and reduced air passenger traffic—there were no major supply chain disruptions, he noted on June 6.  

The Economic Survey 2025-26 is expected to project GDP growth of around 7.4%, based on the First Advance Estimates, significantly higher than the 6.3%–6.8% range projected in the previous Survey. 

The economic growth projections made in the Economic Survey to be tabled today will be based on the current GDP series (2011-12). It is likely that the GDP projections made in the Survey may see some alterations going forward, once the new series with 2022-23 as the base kicks in from February this year. The first GDP growth data based on revised series with 2022 – 23 as the base year will be released on February 27 this year, while the first inflation data with revised base year will be released on February 12, as per the ministry of statistics and programme implementation. On February 27, the second advance estimates of GDP for FY 2025-26 along with quarterly estimates of GDP for Q3, FY 2025-26 will be released.

Economic survey 2025-26 is likely to maintain a cautious approach on the growth outlook for 2026-27, given the geopolitical and tariff disruptions.  Even though the government initiated multiple reforms in the current financial year, including a complete overhaul of the Income Tax Act, GST rationalisation and rate rejig with focus on ease of doing business, kick-starting the long-pending labour reforms,  and finalisation of the key trade pacts with the UK and the EU, the external situation continues to remain challenging.    

There is no breakthrough in the trade talks with the US and US-Iran tensions continue to threaten the global economy. That said there is no positive development on the Russia-Ukraine peace talks as well, and India's Russian oil pipeline is almost severed. All these developments are likely to have a bearing on the FY27 GDP projections in the Economy Survey. 

Finance Minister Nirmala Sitharaman will table the Economic Survey 2025-26 at 12 p.m. in Parliament on today. The survey will be tabled in the Lok Sabha first followed by Rajya Sabha. Given the upswing in the economic growth in the current financial year, it will be interesting to watch out the growth numbers the survey will peg for the next financial year. Last year, the survey had pegged GDP growth of 6.3%-6.8% for FY26. 

Indian equity witnessed selling pressure ahead of today’s (January 29, 2026) Budget session. Finance Minister Nirmala Sitharaman is set to table Economic Survey 2026 in both Houses of Parliament today.

At the time of reporting, the Sensex was trading 546.82points or 0.66% lower at 81,797.86, while the Nifty50 declined to 25,188.15, down 154.61 points or 0.61%.

Data from the past five years show that equity benchmarks—the Sensex and the Nifty50—ended higher on three out of five Economic Survey days.

Ahead of the Budget session in Parliament, Prime Minister Narendra Modi said, "The President's Address yesterday was the expression of the trust of 140 crore Indians, an account of their capability, and of the sketch of their aspirations, especially of the youth. For all MPs, the President also said several things to guide them. At the beginning of the session and 2026, the expectations expressed by the President - I am confident that all MPs took this seriously..."

Modi said the session has begun on a positive note, adding that a confident India has emerged as a beacon of hope for the world and a growing centre of global attraction.