India Delivers Surprise 7.8% GDP Growth Rate In Q1 Before US Tariffs Bite, Beats Estimates

29th August 2025 at 5:43 PM

1 minute read

India’s economy grew at 7.8% in the first quarter of the financial year 2025-26, as per data released by the Ministry of Statistics and Programme Implementation (MoSPI) amid global headwinds.

Mumbai : India’s economy grew at 7.8% in the first quarter of the financial year 2025-26, as per data released by the Ministry of Statistics and Programme Implementation (MoSPI) amid global headwinds, especially the 50% tariff from US President Donald Trump. The strong performance was led by the services sector, which supported the overall Gross Value Added (GVA) growth of 7.6% during the April to June quarter.

Real GDP at constant prices in Q1 of FY26 is estimated at Rs 47.89 lakh crore. This compares with Rs 44.42 lakh crore in Q1 FY25, showing a growth of 7.8%. Nominal GDP at current prices stood at Rs 86.05 lakh crore, higher than Rs 79.08 lakh crore in the same quarter last year, recording an 8.8% rise. Real GVA, which excludes product taxes and subsidies, is estimated at Rs 44.64 lakh crore in Q1 FY26, compared with Rs 41.47 lakh crore a year ago, showing a growth of 7.6%.

The secondary sector showed strong growth, with manufacturing expanding by 7.7% and construction by 7.6%. However, mining and quarrying contracted by 3.1%, while electricity, gas, water supply and other utility services grew only 0.5%. The services sector, or the tertiary sector, showed the strongest growth at 9.3% in Q1 FY26. This is a sharp rise compared to the 6.8% growth recorded in the same period last year.

Private Final Consumption Expenditure (PFCE), which is a measure of household spending, grew by 7.0% in real terms. This was slower than the 8.3% growth seen in the same quarter of the previous year. Gross Fixed Capital Formation (GFCF), which reflects investment in the economy, rose by 7.8% at constant prices in Q1 FY26, compared with 6.7% growth in Q1 FY25.