India GDP Growth FY26, Oil Risks & Market Volatility

Research Desk27 February 20266 min read

India GDP FY26 at 7.6%, fiscal deficit stable, oil risks from Hormuz, weak IPOs and volatile markets—key macro trends shaping India’s outlook.

Weekly Capsule (Feb 23 – Feb 27) and Impact Analysis

News Announcement	Impact Analysis
The MOSPI announced the second estimate for FY26 GDP on 27-February	For FY26, real GDP growth is estimated at 7.6%, compared to 7.1% in the year before that (FY25) in the new GDP series However, the nominal growth in GDP at 8.9% and the nominal GVA growth of 8.7%, are lower than the previous years
Manufacturing and select services are expected to drive GDP growth in FY26	Real manufacturing GVA is expected to grow at 11.5% versus 9.3% in FY25; but agriculture to lag at 2.4% growth in FY26 Services growth expected to be led by trade, hotels, transport, financial services, realty, defence and construction services
MOSPI also announced the actual real GDP and GVA growth for Q3FY26	Real GDP growth in Q3FY26 slowed to 7.8%, with nominal GDP growing relatively slower at 8.9%, as inflation fell sharply Q3FY26 showed a sharp revival in manufacturing at 13.3%; while financial services grew 11.2% and trade at 11.0%
CGA also provided the fiscal deficit update for first 10 months of FY26	The fiscal deficit stood at 63% of full year target, so it looks like fiscal deficit at 4.4% of GDP should be sustained in FY26 The revenues and the expenditure have picked up in January coming to nearly 80% of the full year target for FY26
Non-tax revenues were a fourth of tax revenues but capex has slowed in FY26	After starting off with a bang, the government capex stands at less than 77% of the full year target, excluding state share RBI dividend and hefty dividends from PSU banks and other Central PSUs have helped to prop up the non-tax revenues
SEBI scraps solutions funds and puts strict conditions on thematic funds	Solution funds like retirement funds and children’s funds will be merged based on the appropriate category for them Thematic funds will now have to show less than 50% overlap with other thematic funds as well as other equity funds
India likely to face an oil sourcing issue amid problems at Straits of Hormuz	If Iran blocks the Straits of Hormuz, 2.4 million bpd of crude flowing to India from Gulf and West Asia could be impacted Russia may have to move back to the Chennai-Vladivostok route from Russia, which is free of Middle East troubles
IPOs struggle to get fully subscribed and just manage to scrape through	Out of the 4 IPOs during this week, only Shree Ram Twistex got a healthy subscription of 43.66 times, as others lagged Among other IPOs this week, PNGS Reva (1.30X), Omnitech Engineering (1.20X) and Clean Max (0.99X) disappointed
Tata Sons board has deferred decision on 5-year term extension to Chandra	Since Chandra will cross 65 by the end of the next term, his appointment will require a special resolution by the board Noel Tata has raised some major objections to Chandra deploying funds into perpetually loss-making ventures
Indian ecommerce market to more than double to $300 billion by 2030	BCG believe this trend would be triggered as digital platforms account for just 7% of total consumer spending in India Majority of Indians still use the internet to research and compare products and prefer physical touch-buying
Sensex corrects over 960 points on Friday; Nifty approaches 25,000 level	The sharp fall in markets on Friday was in sympathy with the over 700 points fall in Dow Jones Index on inflation worries That rubbed off on India, even as IT sector has been leading the markets down due to the Anthropic scare in markets
Indo-US trade deal may get delayed amid US Supreme Court order on tariffs	After the US SC struck down Trump’s tariffs as illegitimate, he invoked special powers to impose 10%; and then 15% tariffs However, this decision has already put off Indo-US trade parleys and it remains to be seen how it impacts the deal
Insolvency recoveries in India touched a 15-quarter low level in Q3FY26	In Q3FY26, the insolvency recoveries under the IBC Act fell to a low of 20.02% on the back of sharp haircuts insisted upon The government is examining big changes to the IBC Act, which will cover cross border and group insolvency too
Anthropic and US government clash over military use of its product, Claude	Anthropic had represented that the company had an order from Defence Department for conducting mass surveillance However, the US defence officials have called the statement a lie, and added that the US does not take up mass surveillance
TRAI has cut 5G spectrum reserve price by over 37% ahead of the auctions	DOT has been instructed by TRAI to take back the spectrum that was allotted to Aircel, Reliance Telecom, and RCOM The sharp 37% reduction in the 5G spectrum reserve price will reduce the entry barriers and give a level playing field
CEA Anantha Nageswaran said, India was on track for $4 trillion GDP in FY27	The Chief Economic Advisor (CEA) underlined; consumption and investments would be key drivers of GDP growth in FY27 FY27 is projected to have nominal growth rate of 11.0%, sharply higher than the 8.6% expected in fiscal FY26
Zerodha likely to enable US stock investing via GIFT IFSC by April-May	While MF and Wealth investors already had access to US stocks, this will give access to the retail investors too They will need a broker dealer, who will act as global access provider, which has to be authorized by the IFSCA
Solar stocks take a hit after US imposes 125.87% CVD on solar cells, modules	This countervailing duty (CVD) was targeted at India since these manufacturers had the PLI support edge from centre India now has the highest CVD on solar products at 125.87%, followed by Indonesia at 104.38% and Laos at 80.67% CVD
Bank credit grows at 13-15% as of mid-February, deposits grow by 11.2%	The gap continues to persist and also widen as the deposit growth tapered over the fortnight amid unattractive rates This gap has forced the banks to rely on shorter-term source of bulk deposit funding, at a much higher cost of funds
Noel Tata puts up 2 major conditions for giving third term to Chandrasekaran	The first condition pertains to a game plan to cut losses in semiconductors, batteries and airlines, despite high capex Noel Tata is also looking at an assurance from Chandra that Tata Sons would not go for listing and would stay private
A volatile week for FPI flows and also for Indian rupee; as DFI flows robust	FPIs sold equity worth ₹4,629 crore, but that was more than offset by domestic institutions buying worth ₹24,313 crore FPI outflows and Brent Crude at $72.6/bbl led to the Indian rupee weakening sharply to ₹90.99/$ in the week

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