Data Alert
Q1 GDP print beats expectation, maintains momentum at 7.8%
This story was originally published at 18:38 IST on 31 August 2026
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--India Apr-Jun GDP growth 7.8%
--Informist Poll estimated India Apr-Jun GDP growth at 7.2%
--India Apr-Jun GDP nominal growth 10.3% vs 8.1% year ago
--India Apr-Jun GVA growth 8.2% vs 7.0% year ago
--India Apr-Jun agriculture sector growth 3.6% vs 4.4% year ago
--India Apr-Jun mining sector growth -2.4% vs 12.4% year ago
--India Apr-Jun manufacturing sector growth 9.2% vs 8.3% year ago
--India Apr-Jun construction sector growth 7.7% vs 5.2% year ago
--India Apr-Jun services sector growth 10.0% vs 8.0% year ago
--India Apr-Jun private consumption growth 7.1% vs 6.8% year ago
--India Apr-Jun gross fixed capital formation growth 11.9% vs 5.8% year ago
--India Apr-Jun govt consumption expenditure growth 4.3% vs 4.5% year ago
--India Apr-Jun industry growth 7.7%
NEW DELHI – India's GDP grew quicker than expected and maintained its momentum in the quarter ended June despite the various exogenous shocks, although it moderated on a quarter-on-quarter basis. It grew 7.8% in the June quarter because of higher growth in the services and manufacturing sectors, data released by the statistics ministry Monday showed. The Indian economy had grown 8.6% in the March quarter, and 6.9% in the year-ago quarter.
Growth was higher than expected in the June quarter. According to an Informist Poll, GDP growth in the June quarter was seen at 7.2%. The Apr-Jun growth print was also much higher than the Reserve Bank of India's forecast of 7%. "India's exemplary GDP growth of 7.8% during Q1 of FY 2026-27 is a herculean feat," Prime Minister Narendra Modi said. "The collective strength of our people ensured India delivered such growth despite oil price shocks and supply chain issues in the midst of global uncertainties," he said in a post on X. "Doomsayers were doomed, and India bloomed... yet again!"
Nominal GDP during the quarter rose sharply, with inflation hardening in the past few months. Nominal GDP rose to 10.3% in Apr-Jun from 8.1% a year ago. CPI inflation averaged 3.93% in the June quarter.
The RBI projects GDP growth at 6.7% for the current financial year. The growth outlook, while being maintained at a higher pace compared to its peers, has been impacted by the war in West Asia, which has severely affected India's energy supplies.
"Q1 FY27 GDP growth surprised positively at a robust 7.8% YoY (year-on-year), reflecting broad-based strength across the Indian economy," Vikram Chhabra, senior economist at 360 ONE Asset, said in a note. "Growth has been supported by limited pass-through of higher crude prices to retail fuel prices, which has helped cushion household purchasing power. The GST cuts announced last year continue to provide a structural tailwind to domestic demand."
In the June quarter, the gross value added--which some economists consider a more reliable indicator of economic activity than GDP--grew 8.2% compared to 7% a year ago. GVA growth was driven by the manufacturing sector, which grew 8.6% in the June quarter, 2.5 percentage points higher than a year ago.
"Economic activity remained robust during the Apr-Jun quarter despite the adverse impact of the West Asia conflict on some sectors as well as the unfolding impact of the uneven monsoon," Aditi Nayar, chief economist, ICRA Ltd, said in a note. "Among the sectors, the growth in the manufacturing GVA exceeded expectations, accelerating to 9.2% in Q1 FY27 from 7.9% in Q4 FY26, likely reflecting the uptick in volume growth between these quarters, amid an unfavourable base. Besides, services growth also outperformed expectations in Q1, printing in double digits for the third consecutive quarter, notwithstanding the deceleration as compared to the double-digit growth seen in Q4 FY2026."
Buoyed by the growth in the manufacturing sector, the overall industry growth rose to 7.7% from 6.6% a year ago. The growth could have been better if the mining sector activity had not fallen 2.4% in Apr-Jun. The electricity sector also contributed to the overall growth in the sector, rising 8.9% in Apr-Jun. The construction sector grew 7.7% in Apr-Jun, slower than 8.7% a quarter ago but higher than 5.2% a year ago.
The services sector expanded 10.0% in the quarter ended June, driven by a sharp rise across all subsegments. Agriculture sector growth moderated to 3.6% in Apr-Jun, both on quarter and on year.
On the expenditure side, growth was led by an 11.9% rise in gross fixed capital formation, which reflected higher government capital expenditure during the quarter. Private final consumption expenditure grew 7.1% in the June quarter against 6.8% growth in the year-ago period. Government final consumption expenditure rose 4.3% in Apr-Jun, moderating from 4.5% in the June quarter of FY26.
"We expect growth to moderate going forward," Chhabra said. "A deficient south-west monsoon, amid El Nino conditions, poses downside risks to agriculture and rural demand, while unfavourable base effects are likely to weigh on growth from Q2. We therefore expect FY27 GDP growth to moderate to 6.7–6.9% YoY."
The following table shows quarterly growth in gross value added at basic prices and GDP for the June quarter and previous quarters:
| Sector | 2026-27 | 2025-26 | |||
| Apr-Jun | Jan-Mar | Oct-Dec | Jul-Sept | Apr-Jun | |
| Agriculture | 3.6 | 3.9 | 1.9 | 3.2 | 4.4 |
| Industry | 7.7 | 7.1 | 7.4 | 9.4 | 6.6 |
| Mining | -2.4 | -2.9 | 3.3 | 21.6 | 12.4 |
| Manufacturing | 9.2 | 7.9 | 9.0 | 10.0 | 8.3 |
| Power and gas | 8.9 | 4.8 | 1.9 | 3.8 | -1.8 |
| Construction | 7.7 | 8.7 | 7.0 | 7.8 | 5.2 |
| Services | 10.0 | 11.5 | 10.1 | 9.1 | 8.0 |
| Trade, hotels | 8.5 | 12.9 | 11.7 | 10.6 | 9.8 |
| Financial services | 12.1 | 12.3 | 10.9 | 9.9 | 8.8 |
| Other services | 7.5 | 8.0 | 6.6 | 5.7 | 4.6 |
| GVA | 8.2 | 8.7 | 7.6 | 8.3 | 7.0 |
| GDP | 7.8 | 8.6 | 7.7 | 8.1 | 6.9 |
Source: Ministry of Statistics and Programme Implementation
End
Reported by Priyasmita Dutta
Edited by Rajeev Pai
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