Marking the highest quarterly growth in five quarters, India’s gross domestic product (GDP) grew by 7.8% year-on-year in April-June quarter (Q1) of the current financial year 2025-26 (FY26).

“Real GDP has been estimated to grow by 7.8% in Q1 of FY 2025-26 over the growth rate of 6.5% during Q1 of FY 2024-25,” an official statement said.

India’s real GDP or GDP at constant prices in Q1 of FY 2025-26 is estimated at Rs 47.89 lakh crore, against Rs 44.42 lakh crore in Q1 of FY 2024-25.

As per the official data, agriculture and allied sector recorded real GVA (gross value added) growth rate of 3.7% in Q1 of the current fiscal, as compared to the growth rate of 1.5% registered in Q1 of last financial year.

Secondary sectors, manufacturing and construction logged strong performance in the quarter under review recording 7.7% and 7.6%) growth respectively.

Mining & quarrying (-3.1%) and electricity, gas, water supply and other utility services sector (0.5%) saw moderated growth rate during Q1 of FY 2025-26. At 9.3%, tertiary sector recorded substantial growth rate in Q1 of FY26.

The official data released by Ministry of Statistics & Programme Implementation (MoSPI) showed Government Final Consumption Expenditure (GFCE) bounced back in the June quarter, registering 9.7% growth rate in nominal terms during Q1 of FY26, over the growth rate of 4% in Q1 of FY25.

Real Private Final Consumption Expenditure (PFCE) reported 7% growth rate during Q1 of FY26 as compared to the 8.3% growth rate in the corresponding period of previous financial year.

Gross Fixed Capital Formation (GFCF) recorded 7.8% growth rate in Q1 of FY26.

Commenting on GDP numbers, ICRA chief economist Aditi Nayar said, “After the unexpectedly strong Q1 FY2026, a lower YoY momentum of Government capex and the looming hit to exports from the US tariff and penalties, would dampen growth prints in the coming quarters, notwithstanding the balm offered by GST rationalisation. Amidst continuing uncertainty, we maintain our baseline GDP growth forecast at 6.0% for FY2026.”

She further said, “The sharper than expected GDP growth print, which represents an acceleration over the previous quarter, has doused any expectations that the tariff related turmoil could prompt monetary easing in the October 2025 policy review.”

Radhika Rao, Executive Director and Senior Economist at DBS Bank said, “With a strong 7.8% year-on-year growth in hand and 2Q likely to enjoy the further benefit of a low base, we will revisit our full year growth number, currently at 6.3% YoY (real GDP growth).”