India’s GDP growth rises to 7.8% in Q1 FY27, beats estimates despite global headwinds

India's economy grew 7.8% year-on-year in the April-June quarter of FY2026-27, defying concerns over global disruptions and beating market expectations, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.

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Real Gross Domestic Product (GDP), measured at constant prices, was estimated at ₹81.36 lakh crore in the first quarter of FY27, compared with ₹75.46 lakh crore in the same period a year earlier, MoSPI said.

The growth rate exceeded estimates from economists. A Reuters poll of 58 economists had projected GDP growth of 7.1%, while a Moneycontrol survey of 17 economists had pegged the median forecast at 7.3%.

Nominal GDP expands 10.3%

Nominal GDP, which includes the impact of inflation, rose 10.3% to ₹88.27 lakh crore in Q1 FY27 from ₹80 lakh crore a year earlier, according to MoSPI data.

The ministry said the Indian economy maintained its growth momentum despite global headwinds during the quarter.

Services and investment support growth

Sector-wise data showed Gross Value Added (GVA) at constant prices grew 8.2% in the April-June quarter, according to MoSPI.

The services sector led the expansion. Financial, real estate, IT and professional services recorded growth of 12.1% during the quarter, while the broader tertiary sector expanded 10%.

The secondary sector, which includes manufacturing and construction-related activities, grew 8.6%.

The primary sector recorded growth of 2.9%, supported by a 3.6% increase in agriculture and allied activities.

Consumption and capital spending improve

On the expenditure side, Gross Fixed Capital Formation (GFCF), a measure of investment activity, increased 11.9% in Q1 FY27, compared with 5.8% growth in the corresponding quarter last year, according to MoSPI.

Private Final Consumption Expenditure (PFCE), a key indicator of household spending, rose 7.1% during the quarter.

The data points to continued support from domestic demand and investment activity even as global uncertainty remained elevated.

Previous quarter revised higher

MoSPI also revised India's GDP growth for the January-March quarter of FY26 upward.

Real GDP growth for Q4 FY26 was revised to 8.6% from the earlier estimate of 7.8%, according to the latest official data.

India remains among the fastest-growing major economies globally, with the latest GDP figures indicating resilience in domestic economic activity despite disruptions linked to geopolitical tensions in West Asia and broader global economic uncertainty.

Sources: Ministry of Statistics and Programme Implementation (MoSPI), Reuters poll of economists, Moneycontrol survey of economists, and Business Standard reporting