India's economic growth trajectory for FY26 appears robust, with the first advance estimates placing real GDP growth at 7.40%, up from 6.50% in FY25. The momentum was driven by buoyant performance in the services sector, which helped real gross value added (GVA) growth rise to 7.30%, compared with 6.40% a year earlier.

However, nominal GDP growth has been pegged at 8.00%, a sharp slowdown from 9.80% last year. This widening gap between real and nominal growth reflects lower inflation impacts and has significant implications for fiscal arithmetic and market dynamics.

SBI Analysis: Growth Trajectory and Base Year Revisions

SBI described the FY26 GDP estimate as "expected and reasonable," noting that the historical gap between the Reserve Bank of India's projections and National Statistical Office estimates typically remains within a narrow 20-30 basis point range. The bank expects GDP growth to trend closer to 7.50%, with an upward bias.

Crucially, SBI indicated that growth is likely to look stronger once the new GDP base year is released. The second advance estimates, scheduled for February 27, 2026, along with the base revision to 2022-23, could lead to upward revisions in the growth numbers.

Expenditure Components and Consumption Patterns

On the expenditure side, SBI highlighted a pickup in government consumption, which grew 5.20% in real terms, alongside steady export growth of 6.40%. Private consumption growth moderated slightly to 7.00%, likely reflecting weaker agricultural output, while per capita consumption expenditure rose 6.10%.

One of the more reassuring signals in the data is the improvement in household income. SBI estimates per capita national income will rise by ₹16,025 to ₹2,47,487 in FY26, reflecting the broader resilience in demand despite global and domestic headwinds.

Investment Recovery and Sectoral Performance

Capital formation, which slowed last year, showed signs of recovery, with real growth rising to 7.80%. Nominal capital formation growth improved as well, pointing to a revival in investment momentum.

Services remain the dominant growth engine, estimated to expand 9.10% in FY26, compared with 7.20% last year. Manufacturing growth of 7.00% underpins overall industry growth of 6.00%, even as mining activity is expected to slow.

HDFC Bank's Assessment: Timing and Fiscal Implications

HDFC Bank focused on the timing and composition of expansion, estimating GDP growth in the second half of FY26 at 6.90%, lower than 8.00% in the first half, driven by base effects, seasonal factors and relatively slower government spending to meet fiscal targets.

According to Sakshi Gupta, Principal Economist at HDFC Bank, lower inflation has also weighed on nominal growth. The bank estimates nominal GDP growth at 7.30% in H2FY26, compared with 8.80% in H1.

On fiscal arithmetic, while absolute nominal GDP levels broadly align with Budget assumptions, the moderation in nominal growth combined with income tax and GST cuts could result in a revenue shortfall of ₹1.50-2.00 lakh crore. However, HDFC Bank expects expenditure rationalisation and higher dividend transfer from the Reserve Bank of India to help the Centre meet its fiscal deficit target of 4.40% of GDP for FY26.

Market Response and Policy Implications

Equity markets responded positively to the GDP estimates, with benchmark indices recovering from intraday lows to end near the flatline. The Nifty 50 managed to hold above the 26,100 mark, supported by strength in midcap stocks, even as select heavyweight stocks capped gains for the frontline indices.

Ahead of the Union Budget, the government has signalled a renewed thrust on capital expenditure by unveiling a three-year public-private partnership project pipeline aimed at attracting private sector investment, reinforcing the positive investment outlook reflected in the GDP estimates.

Indian Link Chain Manufactures Limited has announced a significant milestone in India's semiconductor and electronics ecosystem with the launch of the country's first fully indigenous fingerprint sensor module. This breakthrough represents a major stride in advancing national self-reliance in high-technology electronics and semiconductor devices under the Government of India's Make in India and Atmanirbhar Bharat missions.

Indigenous Semiconductor Development

As part of its strategic technology roadmap, the company has successfully acquired complete IP rights, underlying technology, and associated patents for the fingerprint sensor module. This acquisition enables Indian Link Chain Manufactures Limited to design, engineer, package, and test advanced semiconductor products entirely within India, marking a critical milestone for the country's semiconductor independence.

The company has collaborated with a leading Taiwanese technology partner to establish state-of-the-art packaging and product engineering capabilities. With wafer support from the partner and advanced backend processing from the company, the product now represents a true end-to-end semiconductor solution originating from India.

Product Specifications and Features

The indigenous fingerprint sensor module incorporates several advanced features designed for modern applications:

Market Opportunity and Growth Projections

According to Managing Director Mr. Anay Chodankar, the fingerprint sensor module represents the company's first indigenous product and marks a significant step forward in realizing India's Make in India vision. The market opportunity presents substantial growth potential:

This growth is driven by rising smartphone penetration, digital payments (UPI), government-led identity initiatives like DigiYatra, and rapid biometric adoption in financial services, access control, and security applications across the Asia-Pacific region.

Corporate Transformation Initiative

In alignment with its expanded focus on semiconductor design, electronic components, and advanced technology products, the company has initiated steps for a proposed name change from The Indian Link Chain Manufacture Limited to RRP Electronics India Limited. The company has filed a RUN Application in alignment with its object clause, both of which are subject to shareholders' approval. This proposed transition is intended to better align the company's corporate objectives with its evolving role in India's high-technology and semiconductor ecosystem.

Strategic Impact on India's Semiconductor Ecosystem

This milestone advances India's aspiration to establish a robust and globally competitive semiconductor ecosystem. With strong R&D capabilities, international technology collaborations, and advanced domestic manufacturing infrastructure, Indian Link Chain Manufactures Limited aims to deliver high-quality, secure, and competitive biometric semiconductor solutions to both Indian and global markets. The launch signifies a new chapter in India's journey toward semiconductor self-reliance, reinforcing the nation's position as a rising hub for innovation, electronics manufacturing, and secure digital infrastructure under the Atmanirbhar Bharat vision.