NEW DELHI: India's economy grew at a faster-than-expected 7.8 per cent in the April-June quarter, showing resilience in the face of concerns that the war in Iran and resulting global uncertainty could weigh on domestic economic momentum, with Prime Minister Narendra Modi terming the GDP growth a "herculean feat".
Gross domestic product (GDP) growth in the first quarter of the 2026-27 fiscal year slowed from a barnstorming 8.6 per cent in the previous quarter, but remained well above expectations when the conflict erupted and disrupted energy markets.
The pace, that keeps India as the world's fastest growing major economy, also exceeded the Reserve Bank of India's forecast of 7 per cent for the quarter, underscoring the strength of domestic economic activity despite heightened geopolitical risks.
The Q1 growth compares to 6.9 per cent expansion in the year-ago quarter, according to government data released on Monday.
In a post on 'X', the Prime Minister also took a dig at those questioning the state of the Indian economy, saying "doomsayers were doomed and India bloomed yet again".
Modi said that India's exemplary GDP growth during Q1 of FY 2026-27 is a "herculean feat".
"The collective strength of our people ensured India delivered such growth despite oil price shocks and supply chain issues in the midst of global uncertainties.
Finance Minister Nirmala Sitharaman said the reforms undertaken by the NDA government, together with an agile management of the economy, are bearing results, with real GDP growth coming in at 7.8 per cent in the April-June quarter.
"The credit for this strong performance goes to the people of India and their hard work. Reforms undertaken by the NDA Government, together with an agile management of the economy, are bearing results," Sitharaman said in a post on X.
According to the data released by the Ministry of Statistics and Programme Implementation (MoSPI), real GDP at constant prices, in the first quarter of FY27 is estimated at Rs 81.36 lakh crore, against Rs 75.46 lakh crore in the corresponding quarter of 2025-26, showing a growth rate of 7.8 per cent, Ministry of Statistics and Programme Implementation (MoSPI) said.
"Indian economy has sustained growth momentum despite global headwinds," the ministry said.
Nominal GDP, or GDP at current prices, in the April-June quarter of the current fiscal year is estimated at Rs 88.27 lakh crore, against Rs 80 lakh crore in the first quarter of 2025-26, showing a growth rate of 10.3 per cent.
The data showed that gross value added (GVA) at basic prices, which measures the value added by various sectors of the economy, is estimated at Rs 73.82 lakh crore, against Rs 68.21 lakh crore in Q1 of fiscal 2025-26, showing a growth rate of 8.2 per cent.
Nominal GVA in Q1 of 2026-27 is estimated at Rs 80.53 lakh crore, against Rs 72.24 lakh crore in Q1 of FY 2025-26, showing a growth rate of 11.5 per cent.
'Agriculture, livestock, forestry and fishing' GVA grew 3.6 per cent in real terms, while 'mining and quarrying' contracted 2.4 per cent during the quarter under review.
Manufacturing GVA recorded a 9.2 per cent growth, helping the secondary sector expand 8.6 per cent in real terms.
On the expenditure side, gross fixed capital formation (GFCF), a measure of investment, grew 11.9 per cent in Q1 2026-27, sharply up from 5.8 per cent growth in the year-ago quarter.
In a post-GDP data release briefing, Chief Economic Advisor V Anantha Nageswaran said the resilience in the quarterly data is well backed by high frequency indicators.
"...the near term, the domestic economic momentum is very strong, but globally, we are continuing to see uncertainties. We have flagged it in the Economic Review for August. There is concern with respect to the level of interest rates and potential disruptions on energy commodity supplies and also what will happen to the food prices, et cetera," he said.
Nageswaran further said there are multiple issues that are still in the air as far as global affairs are concerned.
"And at some point, they may have an impact on economic activity in the country. But as of now, the domestic momentum and export performance have both combined to deliver another quarter of very strong growth, vindicating the beneficial effects of macroeconomic structural reforms that have been implemented over the last 12 years," he added.
The CEA said the country is now reaping the benefits of the structural reforms in a very uncertain global environment.
Crisil Chief Economist Dharmakirti Joshi said India's real GDP growth continued to outperform expectations in the first quarter of this fiscal year, expanding 7.8 per cent despite geopolitical headwinds stemming from the West Asia conflict.
"The resilience of growth underscores the economy's robust domestic fundamentals and its ability to navigate an increasingly uncertain global environment," Joshi said.
Rajani Sinha, Chief Economist, CareEdge Ratings, too, said the domestic economy has demonstrated resilience in the first quarter.
"Looking ahead, we expect some growth moderation in the coming quarters. The looming global risks from geopolitical tensions and trade policy uncertainty are expected to weigh on the growth outlook," Sinha said, adding that on the domestic front, weather-related uncertainties stemming from the El Niño conditions pose a threat for agricultural output and yields.