New Delhi, Feb 20 The Indian economy continues to register high growth despite a challenging external environment clouded by geo-political uncertainties, the latest RBI Bulletin said on Friday, adding that the recent trade agreements with the European Union (EU) and an interim trade deal framework will help the growth momentum stay robust for a longer period.
According to Central Bank Governor Sanjay Malhotra, benign inflation provides the leeway to remain growth-supportive while preserving financial stability. "We remain committed to meet the productive requirements of the economy and sustain the growth momentum," he said.
High frequency indicators suggest continuation of the strong growth momentum in Q3 2025-26 and beyond.
"With the signing of a landmark trade deal with the European Union and the US trade agreement in sight, growth momentum is likely to be sustained for a longer period," Malhotra said in a Bulletin statement.
The Indian economy continues on a steadily improving trajectory, with real GDP poised to register significantly higher growth of 7.4 per cent in 2025-26, as compared to the previous year.
"Amidst global headwinds, private consumption and fixed investment supported growth. Net external demand, however, remained a drag, with imports outpacing exports. On the supply side, growth in real GVA, on the back of a strong contribution from the services sector and revival in manufacturing activity, is estimated at 7.3 per cent in 2025-26," said Malhotra.
Going forward, economic activity is expected to hold up well in 2026-27. Agricultural activity will be supported by healthy reservoir levels, robust rabi sowing, and improvement in crop vegetation conditions.
Improving corporate sector performance and sustained momentum in informal sector should boost manufacturing activity, the RBI Governor noted. Construction sector growth is expected to remain firm. Services sector should continue to be resilient, with strengthening domestic demand, he added.
On the demand side, the momentum in private consumption is expected to sustain in 2026-27. Rural demand remains steady,10 with improving agricultural activity and rural labour market conditions, said the RBI Bulletin.
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