India’s economy is estimated to have grown 7.35% in the July-September quarter of 2026-27, supported by resilient domestic demand, industrial activity and stronger high-frequency indicators, the Finance Ministry said in the monthly economic review.

The estimate, based on the Economic Division’s nowcasting model, follows real GDP growth of 7.8% in the April-June quarter.

High-frequency indicators pointed to sustained economic momentum during the quarter. Gross goods and services tax collections grew around 15%, compared with about 8.4% in the previous quarter.

Electricity consumption rose 11.1% year on year, while fuel consumption increased 7.9%. Port traffic expanded 10% and industrial production grew 7.7%, according to the review.

Domestic automobile sales grew around 25% year on year, with gains across vehicle segments and in both rural and urban markets. The ministry said a favourable base effect contributed to the increase, though the broad-based expansion also indicated strength in consumption demand.

Business activity moderated during the quarter but strengthened towards September. The manufacturing purchasing managers’ index averaged 53.8 and the services PMI 54.2, with both remaining above the 50 level that separates expansion from contraction.

Industrial activity strengthened towards the end of the quarter. The Index of Industrial Production grew 8% year on year in August, while the Index of Core Industries expanded 7.9% in September.

Bank credit growth also remained strong at 21.6% year on year as of September 30.

The ministry said robust domestic demand, sustained investment activity and a resilient financial sector had supported India’s growth momentum despite a weaker global environment.

The IMF has raised its 2026-2027 growth forecast for India to 7%, while the World Bank, OECD and RBI estimate growth at 7.1%.

The ministry, however, flagged elevated crude oil prices, higher food inflation and uncertainty over the kharif crop as risks for the second half of the fiscal year.