India’s economy expanded faster than expected in the first quarter of FY26, driven by robust investment and resilient consumption.
According to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday, gross domestic product (GDP) grew 7.8 percent year-on-year in the April–June quarter, compared with 6.5 percent in the same period a year earlier.
The growth figure is significantly higher than the Reserve Bank of India’s (RBI) estimate of 6.5 percent for the quarter. At its latest monetary policy meeting earlier this month, the central bank had maintained its growth forecast for both Q1 and the full year at 6.5 percent.
Nominal GDP rose 8.8 percent to ₹86.05 lakh-crore in the June quarter.
Real Gross Value Added (GVA) increased 7.6 percent to ₹44.64 lakh-crore, while nominal GVA expanded 8.8 percent to ₹78.25 lakh-crore.
The strong print follows robust growth in the March quarter of FY25, when GDP expanded 7.4 percent year-on-year, up from a revised 6.4 percent in the December quarter and well above market expectations of 6.7 percent. That marked the fastest pace of the financial year.
The acceleration was supported by easing food and energy prices, lower benchmark interest rates, and a pick-up in investment activity. India’s relatively limited reliance on exports also helped buffer the economy from global tariff-related disruptions.
Gross fixed capital formation surged 9.4 percent, the strongest rise in nearly two years.
Private consumption expanded 6 percent, highlighting resilient domestic demand.
Net exports contributed positively, with exports up 3.9 percent, while imports contracted sharply by 12.7 percent.
RBI’s growth outlook
The RBI continues to project real GDP growth for FY26 at 6.5 percent, underpinned by sustained government capital expenditure, resilient urban demand, and improving rural consumption. Its quarterly forecasts stand at:
Q1 FY26: 6.5 percent
Q2 FY26: 6.7 percent
Q3 FY26: 6.6 percent
Q4 FY26: 6.3 percent
Full year FY26: 6.5 percent