The GDP for the April to June quarter grew 7.8% year on year, beating expectations. However, punishing levies announced by US President Donald Trump, who blames the country’s purchases of Russian oil for funding Moscow’s war in Ukraine, are widely expected to damp future growth

FPJ News Service mumbai

The Indian economy grew 7.8% in the first quarter of FY25-26, recording the highest growth in five quarters before the shocking US tariffs were imposed. The real GDP has been estimated to grow by 7.8% in Q1FY25-26 over the growth rate of 6.5% during Q1 of FY24-25 the National Statistics Office, Ministry of Statistics and Programme Implementation said on Friday.

The estimated growth, according to analysts, stands well-above expectations. Real GDP (at constant prices) in Q1FY26 is estimated at Rs 47.89 lakh crore as against Rs 44.42 lakh crore in Q1 of the previous fiscal year, registering a growth rate of 7.8%. Nominal GDP or GDP at Current Prices in Q1 of FY 2025-26 is estimated at Rs 86.05 lakh crore, against Rs 79.08 lakh crore in Q1 of FY 2024-25, showing a growth rate of 8.8%.

“India remains among the best performing economies in the world. It staged a remarkable comeback from the pandemic with real GDP growth over fiscal 2022 (year-end March 31) to fiscal 2024 averaging 8.8%, the highest in Asia-Pacific. We expect these growth dynamics to continue in the medium term, with GDP increasing 6.8% annually over the next three years. This has a moderating effect on the ratio of government debt to GDP despite still-wide fiscal deficits,” according to S&P Global Ratings.

According to the NSO data, India’s nominal GDP has witnessed a growth rate of 8.8% in Q1 of FY 2025-26. Agriculture and allied sectors have observed the real GVA growth rate of 3.7% as compared to the growth rate of 1.5% registered in Q1 of last fiscal year. Secondary sectors, prominently manufacturing (7.7%) and construction (7.6%) sectors, registered above 7.5% growth rate at constant prices during the quarter.  

Mining and quarrying (-3.1%) and electricity, gas, water supply and other utility services sector (0.5%) has seen a moderate real growth rate during Q1 of FY 2025-26. Tertiary sector (9.3%) has recorded a substantial growth rate at constant prices in Q1 of FY26, over the growth rate of 6.8% in Q1FY25.

Government final consumption expenditure has bounced back, registering a 9.7% growth rate in nominal terms during Q1 of FY25-26, over the growth rate of 4% in Q1FY24-25. Real private final consumption expenditure has reported a 7.0% growth rate during the quarter as compared to the 8.3% growth rate in the corresponding period of the previous financial year. Gross fixed capital formation has recorded 7.8% growth rate at constant prices, over the growth rate of 6.7% in Q1 of FY 2024-25.