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India Records 7.8% GDP Growth in Q1 FY26,Highest in Five Quarters Driven by Services & Manufacturing.

National | Dated: 01 Sep 2025

In the April–June quarter of 2025 (Q1 of FY26), India’s economy recorded a remarkable 7.8% growth, outpacing the 6.5% from the same period last year and marking a five-quarter high. This strong performance significantly exceeded pre-quarter forecasts, reflecting the resilience of the economy.

🎯 Key Highlights:

  • - India’s services sector emerged as the leading contributor, with a 9.3% expansion driven by booming financial, real estate, professional services, and trade, hotels, transport & communication sub-sectors. The manufacturing sector also delivered a strong 7.7% growth, with 85% of incremental Gross Value Added (GVA) coming from these two sectors combined.
  • - Meanwhile, agriculture and allied activities contributed a steady 3.7%, and the overall industry sector grew by 6.3%, underscoring broad-based economic gains.
  • - On the expenditure front, consumer demand remained robust: private consumption grew by 7%, government spending rose by 7.4%, and gross capital formation (capex) increased by 7.8%, illustrating strong economic activity across households, public investment, and business investments.

💡 Other Important Facts:

  • (i) This growth was registered despite external challenges such as heightened trade tensions. Notably, India’s GDP expansion defied expectations amid the imposition of 50% tariffs by the U.S., showing the strength of domestic demand and economic fundamentals.
  • (ii) Government data from the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) confirmed Q1 FY26’s GDP growth was 7.8%, firmly exceeding the 6.5% forecast by the Reserve Bank of India (RBI) and other institutional projections of 6.7%.
  • (iii) Economic analysts and industry chambers responded positively to the news. ASSOCHAM and FICCI highlighted the Q1 performance as evidence of India’s resilience and a strong start to FY26, likely enhancing business sentiment. Meanwhile, policymakers used the data to reinforce India’s narrative as a robust and growing economy—one that continues to build momentum despite global headwinds.

📚 Test Your Knowledge:

Recently, India’s Gross Domestic Product (GDP) grew by how much in Q1 of FY26?

Correct Answer: 7.8%

🚀 Quick Recap: