India’s reset GDP numbers reveal an impressive growth momentum led by the factory sector

Revised estimates of India’s gross domestic product (GDP) released on Friday by the statistics ministry show a slightly smaller output pie than previously estimated, but testify to the Indian economy’s resilience. The new GDP series with 2022-23 as its base year pegs growth in 2025-26 at 7.6%, higher than 7.4% estimated under the old series with base year 2011-12. The slowdown of 2024-25 also turns out far milder, with GDP expansion slowing to 7.1% from 7.2% the year before, instead of 6.5% from 9.2%.

As for this fiscal year, growth in the third quarter ended December is now placed at 7.8%, a robust rate given how US tariffs began to kick in harder. Our growth impulses have been intact—and impressive. The most heartening takeaway, though, is a shift revealed in the structural composition of this momentum.

The manufacturing sector now leads from the front. It has long been a laggard, but recorded a double-digit pace in 2023-24 and is seen on course to do so again this year. Some of this, doubtless, is the effect of reduced proxy use to estimate the informal sector’s output, as the ministry now has a tracker in its Annual Survey of Unincorporated Sector Enterprises for a relatively direct data feed for estimation.

But some of it can plausibly be explained by the improved use of deflators to adjust for inflation and get a closer fix on value added in the factory sector. As a note with this new data series makes clear, changes wrought by a base-year update differ significantly from regular revisions in National Accounts. Globally, the latter “are made only on the basis of updated data becoming available without making any changes in the conceptual framework or using any new data source, to ensure strict comparison over