India Records 7.8% GDP Growth in Q1 FY26,Highest in Five Quarters Driven by Services & Manufacturing.
National
In the April–June quarter of 2025 (Q1 of FY26), India’s economy recorded a remarkable 7.8% growth, outpacing the 6.5% from the same period last year and marking a five-quarter high. This strong performance significantly exceeded pre-quarter forecasts, reflecting the resilience of the economy.
- India’s services sector emerged as the leading contributor, with a 9.3% expansion driven by booming financial, real estate, professional services, and trade, hotels, transport & communication sub-sectors. The manufacturing sector also delivered a strong 7.7% growth, with 85% of incremental Gross Value Added (GVA) coming from these two sectors combined.
- Meanwhile, agriculture and allied activities contributed a steady 3.7%, and the overall industry sector grew by 6.3%, underscoring broad-based economic gains.
- On the expenditure front, consumer demand remained robust: private consumption grew by 7%, government spending rose by 7.4%, and gross capital formation (capex) increased by 7.8%, illustrating strong economic activity across households, public investment, and business investments.
Main Point :- (i) This growth was registered despite external challenges such as heightened trade tensions. Notably, India’s GDP expansion defied expectations amid the imposition of 50% tariffs by the U.S., showing the strength of domestic demand and economic fundamentals.
(ii) Government data from the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) confirmed Q1 FY26’s GDP growth was 7.8%, firmly exceeding the 6.5% forecast by the Reserve Bank of India (RBI) and other institutional projections of 6.7%.
(iii) Economic analysts and industry chambers responded positively to the news. ASSOCHAM and FICCI highlighted the Q1 performance as evidence of India’s resilience and a strong start to FY26, likely enhancing business sentiment. Meanwhile, policymakers used the data to reinforce India’s narrative as a robust and growing economy—one that continues to build momentum despite global headwinds.
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