The economy in numbers
| Indicator | Figure | Source |
|---|---|---|
| Real GDP growth, FY2025-26 | 7.7% (provisional), after 7.1% in FY2024-25 | MoSPI, 5 Jun 2026 |
| Real GDP growth, April–June 2026 | 7.8% | MoSPI, 31 Aug 2026 |
| Gross fixed capital formation, April–June 2026 | up 11.9% | MoSPI |
| Nominal GDP, April–June 2026 | ₹88.27 lakh crore, up 10.3% year on year | MoSPI |
| Size of economy | 6th largest; nominal GDP USD 3.92 tn in FY2025-26 | IMF WEO, April 2026 |
| Working-age population | More than 1.1 bn, the largest globally; median age 28.8 years | Invest India brochure, April 2026 |
| Public capital expenditure, FY2026-27 | ₹12.2 lakh crore, up from ₹11.2 lakh crore budgeted for FY2025-26 | Budget 2026-27 |
Gross fixed capital formation, the investment component of GDP, grew faster than GDP in the first quarter of FY2026-27, and public capex is budgeted to rise again in FY2026-27.
Five reasons the sources give
| Theme | What the sources state |
|---|---|
| Growth has stayed above 7% | Real GDP grew 7.7% in FY2025-26 (provisional), after 7.1% in FY2024-25, and 7.8% in April–June 2026; gross fixed capital formation rose 11.9% in that quarter |
| A large domestic market | Nominal GDP was ₹88.27 lakh crore in April–June 2026, 10.3% higher than a year earlier (MoSPI) |
| A young workforce | Median age 28.8 years; working-age population above 1.1 billion (Invest India) |
| Reform momentum | More than 47,000 compliances reduced and 1,500 obsolete laws repealed (Invest India); trade agreements with Oman (1 June 2026) and the UK (15 July 2026) entered into force this year |
| Public investment keeps rising | Union Budget 2026-27 raises public capital expenditure to ₹12.2 lakh crore, from ₹11.2 lakh crore budgeted for FY2025-26 |
Note: ₹1 lakh crore equals ₹1 trillion.
Foreign capital is arriving
Total FDI inflow reached USD 94,527 mn in FY2025-26, up 17% on FY2024-25 and above every earlier year in the DPIIT series. FDI equity was USD 58,846 mn (₹5.17 lakh crore), up 18%. Inflows continued in April–June 2026, when total FDI was USD 30,657 mn and FDI equity USD 19,817 mn, 6% more than a year earlier. Cumulative total FDI since April 2000 passed USD 1.17 trillion by March 2026.
Singapore, the US and Mauritius were the largest sources of equity, and Maharashtra and Karnataka together took more than half. Computer software and hardware drew the most equity of any sector. The detail, with sources, is on FDI data.
Most sectors are open
Under the consolidated FDI policy of 2020, as amended by Press Notes to September 2026, manufacturing (including contract manufacturing), IT and business services, renewable energy, greenfield pharma, medical devices, single-brand retail and e-commerce marketplaces take 100% FDI under the automatic route: no prior approval, with reporting after the event.
Limits remain where they matter:
- Capped or approval-based: private banks (74%), multi-brand retail (51%, government route), defence above 74%, brownfield pharma above 74%, public-sector banks (20%).
- Prohibited: lottery, gambling and betting; chit funds and Nidhi companies; real estate business and trading in development rights; cigars and cigarettes; atomic energy; railway operations.
- Land-border rule: an investor from, or beneficially owned by, a country sharing a land border with India needs government approval above 10% or where it has control. Press Note 2 of 2026 eased this in part. See land-border investors.
Caps and conditions by sector are on FDI routes and caps.
Infrastructure and public investment
Budget 2026-27 adds seven high-speed rail corridors and City Economic Regions funded at ₹5,000 crore per region over five years. Invest India lists 11 industrial corridors and 12 greenfield industrial smart cities under NICDP, offering plug-and-play sites, and the Budget adds an East Coast Industrial Corridor. New dedicated freight corridors (Dankuni to Surat) and 20 new National Waterways over five years are also planned.
On digital payments, UPI handled about 15 bn transactions a month in FY2024-25 (Economic Survey 2025-26).
Approvals and compliance
Invest India counts more than 47,000 compliances reduced and 1,500 obsolete laws repealed. The National Single Window System (NSWS) is the national approvals portal, and the Economic Survey asks states to link their single windows to it. For projects above ₹500 crore, the Project Monitoring Group, working with Invest India, helps resolve issues.
For government-route FDI, a DPIIT procedure of 4 May 2026 sets a 12-week decision target (plus two weeks where rejection or extra conditions are proposed), excluding time taken by the applicant.
Tax position
The Income-tax Act 2025 replaced the 1961 Act from 1 April 2026. A foreign-owned Indian company can elect the concessional regime at an effective 25.168%. The Finance Act 2026 exempts, subject to conditions, notified foreign companies’ income from cloud services delivered through Indian data centres, to the tax year ending 31 March 2047. A single 15.5% transfer-pricing safe harbour now applies to IT and IT-enabled services. See corporate tax.
Trade access
Since 2022 India has concluded agreements with the UAE, Australia, EFTA, the UK, Oman and New Zealand. The UK and Oman agreements came into force in 2026, and an EU agreement was announced in January 2026 but is not yet signed. See trade agreements.
Incentives
Central schemes are concentrated in electronics, semiconductors, clean energy, hiring and R&D finance. Several production-linked incentive (PLI) schemes now pay only approved applicants, while Semicon 2.0, the equipment window of ECMS and the employment-linked incentive are open. States add capital subsidies, SGST refunds, stamp duty relief and, for GCCs, payroll and rent support. See central schemes and state incentives.
What to weigh
- Ownership chain. The land-border test looks through to beneficial owners above 10%, including later transfers.
- Treaty and PE exposure. The Supreme Court denied Mauritius treaty relief under GAAR in Tiger Global (January 2026) and found a fixed-place PE in Hyatt (July 2025).
- Scheme timing. Many incentives are closed to new entrants, and state packages often depend on applying before investment.
- New labour rules. Four Labour Codes took effect on 21 November 2025, replacing 29 laws.
What to check next
- Confirm the FDI cap and route for your exact activity, and whether any owner in the chain triggers the land-border rule.
- Test whether the incentive you are counting on is open, closed or limited to approved applicants on the incentive tracker.
- Compare the concessional 25.168% regime with the branch rate before choosing an entry vehicle.
- Check whether a trade agreement covers your inputs or exports, and its in-force date.
- Review recent changes on the updates page before relying on any figure here.