India’s economic growth engine maintained its momentum in the April-June quarter of FY27, registering a growth of 7.8%, negating any impact of the conflict in West Asia, late onset of the southwest monsoon and uncertain tariff policies, according to official data released on Monday.
“Real GDP or GDP at constant prices in Q1 of FY 2026-27 is estimated at ₹81.36 lakh crore, against ₹75.46 lakh crore in Q1 of FY 2025-26, showing a growth rate of 7.8%,” the ministry of statistics and programme implementation said in a statement.
The figure exceeded projections made by economists. GDP growth was estimated at 7.4% in a of 21 economists. Though the economists agreed that growth likely slowed to a four-quarter low, the slowdown was likely to be less intense than previously expected, signalling resilience in domestic demand.
Growth was slower than 8.6% in Q4 of FY26 (revised from 7.8% earlier) but higher than 6.8% in the corresponding quarter of the previous financial year. In its latest monetary policy review earlier in August, the Reserve Bank of India pegged growth in the June quarter at 7% (from an earlier projection of 6.6%) while raising its FY27 growth projections to 6.7% from 6.6% earlier.
GVA growth
Nominal GDP witnessed growth of 10.3% in Q1 against 8.1% during Q1 of FY26. Real and nominal gross value added (GVA) have been assessed to grow by 8.2% and 11.5%, respectively, in Q1.
“Tertiary sector has boosted the performance of the economy by registering growth of 10% at constant prices, mainly driven by the Financial, Real Estate, IT and Professional Services’ sector which has observed 12.1% growth,” the ministry said.
The secondary sector registered growth of 8.6% at constant prices. The primary sector grew 2.9% at constant prices, mainly contributed by the performance of Agriculture and Allied sector, which registered 3.6% growth during Q1.
On the expenditure-side, gross fixed capital formation (GFCF) recorded double-digit growth (11.9%) at constant prices against 5.8% in Q1 of FY26. Private final consumption expenditure (PFCE) registered growth of 7.1% at constant prices during the quarter.
The ministry of finance, in a report in July, anticipated that despite the uncertain global environment, the Indian economy sustained its growth momentum during the first quarter of FY27, supported by resilient domestic demand. It, however, said some high-frequency indicators such as e-way bill and manufacturing PMI witnessed some softening in momentum. But the service sector strengthened in Q1 of F27, driven by supportive domestic and external demand conditions.
GDP growth projections
The Asian Development Bank pegged India’s growth at 6.6% in the current fiscal compared with 6.9% estimated earlier. The World Bank expects India’s GDP growth at 6.6% this fiscal year.
India’s retail inflation, which inched to a 19-month high of 4.45% in July, is a matter of concern. Looking ahead, economists are actively monitoring volatile global energy costs on account of the West Asia conflict and potential weather disruptions that could push inflation higher.
Though inflation still remains within the RBI’s tolerance level, a further rise in prices could push the central bank to increase policy rates that could suppress growth in the coming quarters. In its August policy, the RBI revised its inflation projection to 5% (from 5.1% earlier) but said the twin risks arising from an expected below-normal monsoon amid El Niño conditions and elevated energy prices may keep prices high.