India’s GDP maintains growth momentum at 7.8% in Q1, exceeding economists' expectations

India’s economic growth engine maintained its momentum in the April-June quarter of FY27, registering a growth of 7.8%, negating any impact of the conflict in West Asia, late onset of the southwest monsoon and uncertain tariff policies, according to official data released on Monday.

"Real GDP or GDP at constant prices in Q1 of FY 2026-27 is estimated at ₹81.36 lakh crore, against ₹75.46 lakh crore in Q1 of FY 2025-26, showing a growth rate of 7.8%," the ministry of statistics and programme implementation said in a statement.

The figure exceeded projections made by economists. GDP growth was estimated at 7.4% in a Mint poll of 21 economists. Though the economists agreed that growth likely slowed to a four-quarter low, the slowdown was likely to be less intense than previously expected, signalling resilience in domestic demand.

Growth was slower than 8.6% in Q4 of FY26 (revised from 7.8% earlier) but higher than 6.8% in the corresponding quarter of the previous financial year. In its latest monetary policy review earlier in August, the Reserve Bank of India pegged growth in the June quarter at 7% (from an earlier projection of 6.6%) while raising its FY27 growth projections to 6.7% from 6.6% earlier.

“This marks the fourth consecutive quarter of near-potential growth rate for the Indian economy, and momentum into the second quarter of FY27 remains very strong," said Rajni Thakur, chief economist at L&T Finance. "Despite some seasonal softening in the primary sector, 9.2% growth in the manufacturing sector and 10% growth in the services sector bode well for a broad-based growth thrust in the economy.” Chief economic adviser V.

Anantha Nageswaran said growth was supported by manufacturing, services, exports, private consumption and investment despite global uncertainties and the West Asia conflict. “What we are witnessing is continued resilience in Indian economic performance.

I think that’s the key message here,” Nageswaran said from the US. “Despite the West Asia crisis and uncertainties, the first quarter has held up quite well, partly because of the ground efforts to make sure that input provisions were not affected by the crisis.” Nageswaran said the GDP estimates were also corroborated by high-frequency indicators such as GST collections and bank credit.

He highlighted strong automobile sales in both rural and urban markets as another indication of buoyant underlying demand. “The near-term domestic economic momentum is very strong, but globally we are continuing to see uncertainties,” he said.

He added that India’s strong domestic momentum and export performance had combined to deliver another quarter of strong growth, which demonstrated the benefits of the macroeconomic and structural reforms undertaken over the past 12 years.

Nominal GDP witnessed growth of 10.3% in Q1 against 8.1% during Q1 of FY26. Real and nominal gross value added (GVA) have been assessed to grow by 8.2% and 11.5%, respectively, in Q1. “Tertiary sector has boosted the performance of the economy by registering growth of 10% at constant prices, mainly driven by the Financial, Real Estate, IT and Professional Services' sector which has observed 12.1% growth,” the ministry said.

The secondary sector registered growth of 8.6% at constant prices. The primary sector grew 2.9% at constant prices, mainly contributed by the performance of Agriculture and Allied sector, which registered 3.6% growth during Q1.

On the expenditure-side, gross fixed capital formation (GFCF) recorded double-digit growth (11.9%) at constant prices against 5.8% in Q1 of FY26. Private final consumption expenditure (PFCE) registered growth of 7.1% at constant prices during the quarter.

Saurabh Garg, secretary in the ministry of statistics and programme implementation, said the important point is that the overall GDP numbers remain strong. As in the first quarter, growth has been driven by both the services and secondary sectors.