New Delhi, India, January 29, 2026
Finance Minister Nirmala Sitharaman tabled the Economic Survey 2025-26 in Parliament , projecting a moderated GDP growth rate of 6.8% to 7.2% for fiscal year 2026-27.
The survey indicates a slight slowdown from the current fiscal year’s estimated 7.4% growth, attributing the tempered outlook to evolving global conditions. Despite challenges, India has surpassed Japan to become the world’s fourth-largest economy and is advancing toward the $4 trillion milestone.
On employment, the survey highlighted positive trends, with the unemployment rate for individuals aged 15 and above declining steadily from 6% in 2017-18 to 3.2% in 2023-24. Urban unemployment also showed marginal improvement.
Capital expenditure remains heavily concentrated, with approximately 75% directed toward defense, railways, and road transport sectors in the previous year.
Foreign equity inflows were led by the services sector at 19.1%, followed by computer software and hardware. The survey expressed concern over limited industrial research and development, noting its concentration primarily in pharmaceuticals, IT, and defense, and called for broader expansion.
Global uncertainties, particularly U.S. tariffs of up to 50% on certain Indian exports—including textiles, gems and jewelry, and leather—linked to India’s oil purchases from Russia and the Ukraine situation, were flagged as key risks affecting growth projections.
India’s resilience stems from strong domestic manufacturing growth, interest rate cuts totaling 1.25% by the RBI in 2025 amid lower inflation, and GST rate reductions supporting demand.
The survey noted strategic diversification through finalized trade agreements with the European Union, United Kingdom, New Zealand, and Oman, reducing reliance on any single market.
The government reiterated its focus on reforms to achieve the $5 trillion economy goal and Prime Minister Modi’s vision of making India a developed nation by 2047, which experts suggest requires sustained 8% annual growth.
