New Delhi: India’s economy recorded a robust 7.8% GDP growth in the April-June quarter of FY 2026-27, significantly outperforming the 6.9% growth registered during the same period last year. Although the pace was lower than the 8.6% growth recorded in the January-March quarter, the latest figures underline the continued resilience of the Indian economy amid global uncertainty, oil price shocks and supply-chain disruptions.
The stronger-than-expected performance was led primarily by the manufacturing sector and broad-based growth in services, while agriculture and mining remained relatively weaker.
Prime Minister Narendra Modi described the 7.8% growth as an “exemplary” achievement, attributing the performance to the collective strength and hard work of Indians. He also highlighted that the economy delivered strong growth despite external challenges, including oil price volatility and global supply-chain pressures.
Finance Minister Nirmala Sitharaman said nominal GDP expanded by 10.3% during Q1 FY27, while real Gross Value Added (GVA) grew by 8.2%. She credited the performance to the people of India and said that reforms undertaken by the NDA government, coupled with effective economic management, were producing results.
Manufacturing and investment drive growth
The manufacturing sector emerged as one of the biggest growth engines, expanding by 9.2% in Q1 FY27, compared with 8.3% during the corresponding quarter last year. Economists attributed the strong performance partly to infrastructure-linked companies and continued investment.
Gross Fixed Capital Formation (GFCF), an important indicator of investment activity, rose to 34.3% of nominal GDP, compared with 31.4% a year earlier. GFCF itself grew by an impressive 20.4% during the quarter, with investment reportedly supported by areas such as data centres, power and metals.
Other parts of the secondary sector also performed strongly. Construction grew 7.7%, up from 5.2% a year earlier, while electricity, gas, water supply and other utility services expanded 8.9%.
Services remain a key pillar
India’s services sector recorded aggregate growth of 10%, compared with 8% in Q1 FY26. Financial services, real estate, ownership of dwellings, IT and professional services grew by 12.1%, considerably higher than the 8.8% recorded a year earlier.
However, agriculture growth moderated to 3.6%, while mining and quarrying contracted 2.4%, partly reflecting a high base of 12.4% growth in the same quarter last year.
While economists expect some moderation ahead due to monsoon-related risks and base effects, the latest figures reinforce India’s position as a major global growth engine and highlight the economy’s ability to maintain strong momentum despite challenging international conditions.
