Why Is SBI Research Confident of 7.5% GDP Growth for India in FY26?
About the SBI Research Projection
SBI Research has projected India’s economic growth for FY26 at 7.5 percent, with an explicit upward bias, suggesting that actual outcomes could exceed current official estimates. This projection comes at a time of heightened global uncertainty, slowing external demand, and cautious fiscal management. Despite these headwinds, SBI Research believes India’s domestic demand strength will remain the primary engine supporting growth momentum.
According to the first advance estimates released by the National Statistical Office, GDP growth for FY26 is pegged at 7.4 percent, higher than the 6.5 percent recorded previously. SBI Research expects this figure to be revised upward as more comprehensive data becomes available, particularly after base-year revisions and incorporation of high-frequency indicators.
Key Highlights From the SBI Research View
🔹 FY26 GDP growth projected at 7.5 percent with an upward bias.
🔹 First advance estimate places growth at 7.4 percent, aligned with internal forecasts.
🔹 Strong Q1 and Q2 performance provides cushion for full-year growth.
🔹 Domestic demand expected to offset global uncertainty.
🔹 Nominal GDP growth likely to moderate due to lower inflation prints.
SBI Research noted that GDP growth in the April–June quarter stood at around 7.8 percent, while the July–September quarter recorded an even stronger 8.2 percent expansion. This front-loaded growth has created a higher base, which explains why the second half of FY26 is expected to see some moderation rather than a sharp slowdown.
For market participants, such macro projections often translate into sectoral rotation rather than broad-based index rallies. Traders navigating these shifts often rely on structured approaches such as a Nifty Tip framework to stay aligned with evolving economic cues.
Growth Estimates and Economic Indicators
| Indicator | FY26 Outlook |
|---|---|
| Real GDP Growth | 7.4–7.6 percent |
| SBI Research Estimate | 7.5 percent (upward bias) |
| Nominal GDP Growth | Moderating due to lower inflation |
| H2 Growth Trend | Lower than H1 due to base effect |
The report also highlights that differences between RBI and NSO growth estimates typically range between 20 to 30 basis points, making the current projections statistically reasonable. Any upward revision post base-year recalibration could further reinforce confidence in India’s medium-term growth trajectory.
Strengths🔹 Strong domestic consumption supporting growth. 🔹 Front-loaded quarterly performance providing buffer. 🔹 Policy continuity and fiscal discipline. |
Weaknesses🔹 Slower global growth impacting exports. 🔹 Moderation expected in second-half GDP growth. 🔹 Lower nominal growth due to easing inflation. |
Economists have also pointed out that subdued nominal GDP growth reflects cooling inflation rather than economic stress. In fact, lower inflation improves real purchasing power and could support sustained consumption-led expansion.
Opportunities🔹 Domestic demand-led sectors gaining traction. 🔹 Improved consumption outlook from GST buoyancy. 🔹 Scope for upward revision after data consolidation. |
Threats🔻 Prolonged global slowdown affecting trade. 🔻 Fiscal tightening in H2 to meet targets. 🔻 External shocks impacting capital flows. |
SBI Research emphasised that domestic demand will be the decisive growth lever amid global uncertainty. High-frequency indicators, including GST collections and consumption trends, suggest resilience that could counterbalance weaker external conditions.
Valuation and Investment View
A 7.5 percent growth trajectory with an upward bias strengthens the medium-term investment case for India, particularly in domestically oriented sectors such as banking, consumption, infrastructure, and manufacturing. While short-term market volatility may persist due to global cues, the macro backdrop remains supportive. Traders can navigate these phases more effectively through disciplined strategies such as a BankNifty Tip approach aligned with macro and liquidity signals.
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes that India’s growth outlook for FY26 reflects structural resilience rather than cyclical exuberance. Investors should focus on balance-sheet strength and domestic demand exposure while remaining mindful of global risks. For continuous macro and market insights, readers can explore free content at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on India GDP Growth and Economy
Why is SBI Research bullish on FY26 GDP growth?
What does upward bias in GDP estimate mean?
How domestic demand supports India’s economy?
Why is H2 growth expected to slow?
How GDP growth impacts equity markets?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
