India’s GDP growth accelerates to 7.8% in 1Q FY27

Thursday, 3 September 2026 00:20 - - {{hitsCtrl.values.hits}}

India’s GDP grew 7.8% in the first quarter of FY27 to INR 81.36 trillion, compared with a revised 6.9% in the same quarter last fiscal, despite disruptions in West Asia, elevated energy prices, and global trade uncertainties.

Government of India Chief Economic Adviser V. Anantha Nageswaran said the numbers reflect “continued resilience in the Indian growth performance,” with contributions across sectors.

“All the sectors have contributed. Agriculture, slightly less so, but we have manufacturing and services doing quite well in 1Q despite the West Asia-related uncertainty,” he said, crediting Government efforts to insulate input supplies from the crisis.

He cautioned that the disruptions could persist longer than expected, keeping crude oil above $ 80 a barrel and posing risks to global demand and India’s export growth.

“Have to keep our diversification effort going on and ensure cost competitiveness,” he said.

Growth was driven by a 9.2% expansion in manufacturing and surging investment demand, with Gross Fixed Capital Formation (GFCF) rising 11.9%, according to data released by the Ministry of Statistics and Program Implementation (MoSPI) on Monday. Agriculture grew a steady 3.6%, electricity and utility services rebounded 8.9%, and construction rose 7.7%, offsetting a 2.4% contraction in mining.

Real Gross Value Added (GVA) grew 8.2% to INR 73.82 trillion, while nominal GDP expanded 10.3% to INR 88.27 trillion.

The 1Q numbers beat most growth estimates, including the Reserve Bank of India’s (RBI) 7% projection, but came in below the revised 4Q FY26 growth rate of 8.6%.

Indian Prime Minister Narendra Modi called the performance a “herculean feat” on ‘X,’ adding: “Doomsayers were doomed and India bloomed…yet again!”

Indian Finance Minister Nirmala Sitharaman credited the “hard work” of Indians. “Reforms undertaken by the NDA [National Democratic Alliance] Government, together with an agile management of the economy, are bearing results. The NDA Government, led by PM Shri Narendra Modi, remains committed to further expanding economic opportunities for all our citizens,” she said on ‘X.’

Bank of Baroda Chief Economist Madan Sabnavis said growth came in “much higher than expected” against the bank’s forecast of 7-7.2%.

“Growth has been spearheaded by capital formation. This is a major takeaway as this involves both private and Government expenditure, with the former being driven by data centres and power besides metals,” he said, adding that full-year growth could now rise to 7% — a fourth successive year of above-7% expansion.

The MoSPI also released updated national accounts estimates using a new Producer Price Index and IIP series, with the next quarterly GDP data due 30 November. (Source: The Hindu Business Line)