India’s GDP grew at 7.8 per cent in the first quarter (April—June) of this financial year, as announced by the government on Monday evening.
The decent figures- nominal GDP growth is at 10.3 per cent- fly in the face of fears that the strife in the Middle East, with the resultant rise in fuel and fertiliser prices, the uncertainty in trade due to Trump’s tariff tantrums, as well as the vagaries of the monsoon, especially seen in below-normal rainfall in June, would lead to a below-par showing.
“Indian economy has sustained growth momentum despite global headwinds,” said an official statement issued by the government.
Yet, the warning signs are very much there – considering that 7.8 per cent real GDP growth only equalises the figures from the previous quarter, this technically makes it the fourth quarter in a row that the nation’s economy has been falling – before the 7.8 per cent in the previous quarter (January to March), the growth rate was 8 per cent in the the three-month period before that (October to December 2025). And it was 8.2 per cent in the quarter before that (July to September 2025).
This would make the ongoing quarter (July—September) as well as the next one (October—December) crucial, for the post-monsoon agricultural activity now and the festive season consumer spending in the next quarter could well determine the future trajectory of India’s economic strength.
Growth has been uneven across sectors, with agriculture performing fairly well at 3.6 per cent growth, carrying forward the primary sector. While the secondary sector grew 8.6 per cent, the tertiary sector did well at 10 per cent. Here, too, it was only certain parts of it, like real estate, financial services, etc, which put in stellar performances (along with IT and professional services; their growth was at 12.1 per cent).
Despite the steady fall in GDP growth over the past 12 months, India would still retain its tag as the world’s fastest-growing major economy, even though RBI’s estimate is that the growth rate will further stutter in the coming quarters of this year. The prediction is a growth rate of 6.4 per cent for the ongoing quarter (July to September), before marginally improving to 6.5 per cent and 6.8 per cent for the remaining quarters of this financial year.
However, Finance Minister Nirmala Sitharaman has expressed confidence that India will sustain its 7 per cent plus annual GDP growth seen since Covid this financial year, too.
In the year-ago corresponding quarter (Q1 of FY26 April—June), India’s GDP expansion was at a rate of 6.8 per cent.
This is the third time that the Centre is publishing macroeconomic data based on the new base year of 2022-23, replacing the previously used base year of 2011-12.
The explanation was that this was aimed at providing a more accurate gauge of overall growth momentum and the current structure of the Indian economy. 2022-23 was selected, as the government explained, since it was the first ‘normal year’ after the Covid-19 pandemic and lockdown disruptions of the previous three years or so.
This ‘rebasing’ had resulted in India’s GDP for last year at 7.7 per cent, while that for the year before was at 7.1 per cent.
Analysts had expected the growth to remain strong, with SBI sticking its neck out by predicting a growth rate of 8 per cent. While Bank of Baroda and EY spoke of a band between 7–7.2 per cent, Barclays brokerage put it at 7.5 per cent, while India Ratings was more conservative at 6.8 per cent.
