India’s GDP trumps expectations, grows 7.8% in Q1 FY2026; THIS sector witnesses highest growth, it is…

India's GDP grew by a stronger-than-expected 7.8 per cent in the April-June quarter, its fastest pace in five quarters, surpassing the expected 6.5-7% growth most analysts had predicted for Q1 FY26.

India GDP growth rate: India’s gross domestic product (GDP) exceeded all estimates as it grew at 7.8 percent the first quarter ended June 30, 2025. As per official data released on Friday (August 29), India’s economy grew by a stronger-than-expected 7.8 per cent in the April-June quarter, its fastest pace in five quarters, surpassing the expected 6.5-7% growth most analysts had predicted for Q1 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,” according to a statement issued by the Ministry of Statistics & Programme Implementation.

How much did India’s GDP grow in Q1?

As per government data, the 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, registering a growth rate of 7.8 per cent, while the Nominal GDP or GDP at Current Prices in Q1 of FY 2025-26 is estimated at Rs 86.05 lakh crore, against Rs 79.08 lakh crore in Q1 of FY 2024-25, showing a growth rate of 8.8 per cent.

Real Private Final Consumption Expenditure (PFCE) reported a 7.0 per cent growth rate during the reporting quarter compared to the 8.3 per cent growth rate in the same period last fiscal, while Gross Fixed Capital Formation (GFCF) witnessed a 7.8 per cent growth rate at Constant Prices, as against the growth rate of 6.7 per cent in Q1 of FY25, the data released by the National Statistics Office (NSO) showed.

Further, the NSO data revealed that Government Final Consumption Expenditure (GFCE) has registered a 9.7 per cent growth rate in nominal terms during Q1 of FY 2025-26, more than double of the 4.0 percent growth rate seen in the same quarter last year.

The discrepancies (differences in values calculated using different methods of GDP estimation) jumped to Rs 1.11 lakh crore during the first quarter of this fiscal from Rs 33,384 crore in the same period year ago.

Gross Fixed Capital Formation (GFCF) has recorded a 7.8 per cent growth rate at Constant Prices, as against the growth rate of 6.7 per cent in Q1 of FY25.

Which sectors powered India GDP growth?

The GDP growth in the first quarter of the current fiscal year was mainly driven due to a stellar showing by the farm sector, and also helped by services like trade, hotel, financial and real estate, the data revealed. The agriculture sector recorded a 3.7 per cent growth, up from 1.5 per cent in the April-June period of 2024-25, it showed.

Additionally, the tertiary sector , which includes services like trade, hotel, transport, financial institutions, real estate, professional services, public administration and defence, registered a substantial 9.3 percent growth rate at Constant Prices in Q1 of FY2025-26, compared to 6.8 percent in Q1 of FY 2024-25.

On the other hand, mining & quarrying (-3.1 per cent) and electricity, gas, water supply and other utility services sector (0.5 per cent) saw a moderated real growth rate during Q1 of FY 2025-26, as per the NSO data.

HIGHLIGHTS

• India’s GDP grew at 7.8 percent in Q1 of FY 2025-26, exceeding expectations from leading bodies and analysts.
• As per official data, Real GDP or GDP at Constant Prices in Q1 of FY 2025-26 is estimated at Rs 47.89 lakh crore.
• Nominal GDP or GDP at Current Prices in Q1 of FY 2025-26 is estimated at Rs 86.05 lakh crore
• The GDP growth was powered by the farm sector and the tertiary sector.

Meanwhile, owing to the stellar showing in the first quarter of the ongoing fiscal year, India continues to be the fastest-growing major economy, as China’s GDP growth in the April-June period was 5.2 percent.

The previous highest pace of growth in India’s GDP was recorded at 8.4 per cent during January-March 2024, as per the data.