Rating agency ICRA has estimated that India’s gross domestic product (GDP) growth likely to ease to 7.2% in third quarter of current fiscal year (Q3FY26) as compared to 8.2% in Q2FY26. It noted that robust performance in the industrial sector may be outweighed by slow growth in sectors such as services and agriculture. The growth in services sector likely to fell to 7.8% in Q3FY26 as against 9.2% in Q2FY26, and agriculture sector growth came down to 3.0% in Q3FY26 as against 3.5% in Q2FY26. However, the industrial sector growth picked up to a six-quarter high of 8.3% Q3FY26 from 7.7% in Q2FY26.

The rating agency has estimated that the Y-o-Y growth in the services gross value added (GVA) to moderate to 7.8% in Q3FY26 from 9.2% in Q2FY26, dampened by lower expansion in Government spending and services exports. The government’s capital expenditure dipped to Rs 2.1 trillion in Q3FY26 from Rs 3.1 trillion in Q2FY26. Notwithstanding a broadly favourable trend in kharif output, the GVA growth of agriculture, forestry and fishing may moderate in Q3FY26 (from growth of 6.6% in Q3FY25) relative to 3.5% recorded in Q2FY26 (4.1% in Q2FY25), particularly on account of the high base (this may undergo a change in the new series).

ICRA also pegged the industrial GVA growth to record a broad-based improvement to a six-quarter high of 8.3% in Q3FY26 from 7.7% in Q2FY26, supporting the overall expansion in the said quarter. ICRA has projected the manufacturing GVA to record a high-single digit growth in Q3FY26 (9.1% in Q2FY26). Among the other industrial sub-segments, mining output witnessed a Y-o-Y expansion of 3.8% in Q3FY26 after two consecutive quarters of contraction, partly reflecting the easing of disruptions caused by monsoons and unseasonal rainfall. Besides, construction-related indicators such as infrastructure/construction goods (10.7% in Q3FY26 against 11.6% in Q2FY26) also posted a healthy rise in output, suggesting that construction GVA growth likely remained robust in the Q3FY26 (7.2% in Q2FY26).