India's Q1 GDP Growth Accelerates To 7.8%
Real GDP expanded 7.8% in April-June FY27, exceeding RBI's projection and extending India's run as among the world's fastest-growing major economies
Synopsis
Based on the data from the National Statistical Office, India's real GDP has expanded by 7.8% for the April-June quarter of FY27, surpassing RBI's 7% projection and economist estimates of 7-7.2%. Real GDP hit a high of ₹81.36 lakh crore compared with the value at ₹75.46 lakh crore in the previous year, with manufacturing and services sector growth providing the impetus.
The growth exceeded official forecasts
Real Gross Domestic Product (GDP at constant prices) in the first quarter of FY27 is estimated at ₹81.36 lakh crore, which is 7.8% higher than it was in the first quarter of 2025-26 at ₹75.46 lakh crore, the Ministry of Statistics and Programme Implementation said. In its release, the ministry stated that the Indian economy has maintained its growth momentum in spite of global challenges.
The figure was on the high side of expectations. Economists had been anticipating an increase in growth between 7 and 7.2 percent, up from last year's 6.8 percent. It was even better than the Reserve Bank of India's own growth forecast which had projected Q1FY27 growth at 7 percent and full year growth at 6.7 percent.
The growth of nominal GDP is even higher
Growth was even faster at the nominal or current price level of output. Nominal GDP at Current Prices in Q1 of FY 2026-27 is estimated at ₹88.27 lakh crore, against ₹80.00 lakh crore in Q1 of FY 2025-26, showing a growth rate of 10.3%. The real growth is also above the nominal growth, suggesting higher prices are contributing to the overall output growth.
Sectoral Drivers
The detailed sectoral breakdown, accompanying the overall figures, showed that manufacturing had grown by around 9.2%, a significant contributor to the overall growth. The acceleration is coming after a strong close of the previous fiscal year. The latest Q1 FY27 figure is revised from the 8.6% growth seen in Q4 FY26, and marks a 6.9% growth from the previous year Q1 figure.
This 7.8% actual GDP growth was also higher than the RBI's previous estimate of 7%, which is significant not only during bank exams, but also when questions compare actual economic growth with the RBI's.
Position the Number within the other Numbers
The quarter-on-quarter increase is slightly less than the one in the previous quarter, after revisions, but it is a year-on-year gain that indicates some underlying strength. The growth of the Indian economy was higher at 7.8 percent in the fourth quarter of Fiscal Year (FY)26 as against 7.9 percent in the previous quarter. Gross Value Added (GVA) grew at 7.9 percent in Q4 of FY26 and 8 percent in the previous quarter.
The statistical office had already noted strength in the base numbers for the whole financial year. The government has also issued estimates for the full year, with real GDP growth at 7.7 per cent in FY26 as compared to 7.1 per cent in FY25, at ₹323.12 lakh crore.
The outlook is gloomy with global headwinds
Despite good domestic indicators, economists warn of external risks. However, the external risks, ranging from US tariffs to fluctuating crude and fertiliser costs, remain in the picture as the economy's growth momentum is tipped up by confidence in India's underlying growth story.