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Informist, Friday, Aug. 29, 2025

 

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--India Apr-Jun GDP growth at 7.8%
--Informist poll estimated India Apr-Jun GDP growth at 6.7%
--India Apr-Jun GDP growth 7.8% vs 6.5% year ago
--India Apr-Jun GDP growth of 7.8% highest in 5 quarters
--India Apr-Jun GVA growth 7.6% vs 6.5% year ago
--India Apr-Jun agriculture sector growth 3.7% vs 1.5% year ago
--India Apr-Jun mining sector growth -3.1% vs 6.6% year ago
--India Apr-Jun manufacturing sector growth 7.7% vs 7.6% year ago
--India Apr-Jun construction sector growth 7.6% vs 10.1% year ago
--India Apr-Jun industry growth 6.3% vs 8.5% year ago
--India Apr-Jun services sector growth 9.3% vs 6.8% year ago
--India Apr-Jun private consumption growth 7.0% vs 8.3% year ago
--India Apr-Jun gross fixed capital formation growth 7.8% vs 6.7% year ago
--India Apr-Jun govt consumption expenditure growth 7.4% vs -0.3% year ago

 

NEW DELHI - India's GDP growth rose quicker than expected to a five-quarter high of 7.8% in Apr-Jun because of a higher growth in services and manufacturing sectors, data released by the statistics ministry Friday showed. The Indian economy had grown 7.4% in the March quarter and 6.5% in the year-ago quarter. 

 

Growth was much higher than expectation in the June quarter. According to an Informist poll, GDP growth in the June quarter was seen at 6.7%. The Apr-Jun growth print was also much higher than the Reserve Bank of India's forecast of 6.5%.

 

The rise in real GDP growth was also supported by lower inflation, with nominal GDP growth falling to a three-quarter low of 8.8% in the June quarter. Nominal GDP grew 10.8% in the March quarter and 9.7% in Apr-Jun 2024. CPI inflation averaged 2.7% in the June quarter, compared with 4.9% a year ago, and WPI inflation fell to 0.3% in Apr-Jun from 2.5% a year ago.

 

"This growth rate will provide a major cushion to any downside that the economy could witness due to the effect of higher tariff imposition by the US," Bank of Baroda Chief Economist Madan Sabnavis said in a note. "The economy hence does look poised to clock the growth rate of 6.5% for the year notwithstanding the tariff effects which could affect growth by 0.2-0.4%," Sabnavis said. 

 

The RBI projects GDP growth at 6.5% for the current financial year. The imposition of 50% tariff by the US on imports from India is seen hurting exports and economic activity. Before the June quarter GDP data was released, economists were projecting a GDP growth of around 6.3% with some seeing the number at below 6%. 

 

In the June quarter, the gross value added--which some economists consider a more reliable indicator of economic activity than GDP--grew 7.6%, a six-quarter high. GVA growth was driven by the manufacturing sector, which grew at a five-quarter high of 7.7% in the June quarter.

 

Despite healthy growth in the manufacturing sector, the overall industry growth moderated to 6.3% in the June quarter because of mining and electricity sectors, which performed worse than the March quarter. Mining sector activity fell 3.1% on year in the June quarter while electricity rose just 0.5%. The construction sector grew 7.6% in Apr-Jun, slower than 10.8% a quarter ago and 10.1% a year ago.

 

The services sector expanded 9.3% in the quarter ended June, an eight-quarter high, driven by a sharp rise across all subsegments. Agriculture sector growth moderated to a four-quarter low of 3.7% in Apr-Jun.

 

On the expenditure side, growth was led by a 7.8% rise in gross fixed capital formation, which reflected higher government capital expenditure during the quarter. Private final consumption expenditure grew 7.0% in the June quarter against 6.0% growth in Jan-Mar. Government final consumption expenditure rose 7.4% in Apr-Jun, after contracting 1.8% in the March quarter.

 

"Headline GDP growth of 7.8% suggests that the economy is in rude health...but the economy faces stiffer headwinds – namely the direct impact of the 50% US tariff imposed on India this month," Joe Maher, assistant economist at Capital Economics, said in a note. "That said, upcoming cuts to GST rates will cushion the blow somewhat, as will a weaker rupee." 

 

According to ICRA Chief Economist Aditi Nayar, the higher-than-expected growth in first quarter of FY26 has "doused any expectations that the tariff related turmoil could prompt monetary easing in the October 2025 policy review." The RBI's Monetary Policy Committee left the repo rate unchanged at 5.50% on Aug. 6, having lowered the policy rate by 100 basis points between February and June. 

 

The following table shows quarterly growth in gross value added at basic prices and GDP for the June quarter and previous quarters:

 

Sector	2025-26	2024-25
	Apr-Jun	Jan-Mar	Oct-Dec	Jul-Sept	Apr-Jun
Agriculture	3.7%	5.4%	6.6%	4.1%	1.5%
Industry	6.3%	6.5%	4.8%	3.8%	8.5%
Mining	(-)3.1%	2.5%	1.3%	(-)0.4%	6.6%
Manufacturing	7.7%	4.8%	3.6%	2.2%	7.6%
Power and gas	0.5%	5.4%	5.1%	3.0%	10.2%
Construction	7.6%	10.8%	7.9%	8.4%	10.1%
Services	9.3%	7.3%	7.4%	7.2%	6.8%
Trade, hotels	8.6%	6.0%	6.7%	6.1%	5.4%
Financial services	9.5%	7.8%	7.1%	7.2%	6.6%
Other services	9.8%	8.7%	8.9%	8.9%	9.0%
GVA	7.6%	6.8%	6.5%	5.8%	6.5%
GDP	7.8%	7.4%	6.4%	5.6%	6.5%

 

Source: Ministry of Statistics and Programme Implementation

 

End

 

Reported by Shubham Rana

Edited by Akul Nishant Akhoury

 

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