India’s economy grew 7.8% year-on-year in the April-June quarter of FY27, beating market expectations and the Reserve Bank of India’s projection. The strong performance comes despite geopolitical tensions, elevated energy prices and global economic uncertainty.
The National Statistics Office said in a statement, “Real GDP or GDP at Constant Prices in Q1 of FY 2026-27 is estimated at Rs. 81.36 lakh crore, against Rs. 75.46 lakh crore in Q1 of FY 2025-26, showing a growth rate of 7.8%.”
However, the latest figure represents a moderation from the revised 8.6% growth recorded in Q4 FY26. The data therefore points to sustained momentum rather than a fresh acceleration in economic activity.
Manufacturing was among the top-performing sectors for the quarter, as it grew by 9.2%, driven by ongoing industrial activities and improved productivity. Construction grew 7.7%, whereas electricity, gas, water supply and other utilities grew 8.9%.
Agriculture also remains a watchpoint. The sector grew 3.6% in Q1, while mining contracted 2.4%, highlighting uneven growth across the primary sector. A weaker monsoon could add pressure to rural demand and agricultural output in the coming quarters.
The Q1 numbers strengthen the case for continued economic resilience, but policymakers will need to monitor inflation, crude prices and global financial conditions. The RBI’s FY27 growth projection stands at 6.7%, leaving room for moderation after the strong opening quarter.
For now, the 7.8% growth rate signals that domestic demand, manufacturing and investment are providing a strong buffer against external shocks.
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