Key facts
- India's economic growth likely eased to 7.2% in the first quarter of 2026.
- Weaker external demand and softer industrial activity are key factors.
- Strong government spending and resilient agricultural growth are supporting the economy.
- Moribund private investment means government capital expenditure is crucial for growth.
India's economy, the fastest-growing among major economies, is expected to show a moderation in its growth rate for the first quarter of 2026. While external demand has softened and industrial activity has seen a slowdown, robust government spending and a steady agricultural sector are providing support. The reliance on government capital expenditure underscores the ongoing challenge of stimulating private investment.