The year-on-year (YoY) growth in the production of rabi crops, mining and electricity output, as well as most indicators pertaining to the services sector improved in Q4 FY2026 compared to Q3 FY2026. Additionally, slower rise in manufacturing volumes, contraction in exports, combined with the nascent signs of margin pressure, amid the West Asia fallout, may have weighed on the industrial GVA growth performance. Overall, ICRA expects GDP growth of 7.0% in Q4 FY2026 (vs. NSO’s estimate of +7.3%), lower than 7.8% in Q3 FY2026. This would translate into a full-year FY2026 expansion of 7.5%, below the NSO’s estimate for the fiscal. ICRA now assumes crude oil prices to average at ~$95/bbl in FY2027, against our prior estimate of $85/bbl, given the ongoing stickiness in prices amid the stalemate in West Asia. Consequently, we have pared our baseline forecast for the FY2027 GDP growth (at constant 2022-23 prices) to 6.2% from the 6.5% expected earlier.

EXHIBIT: Contribution of GVA components