India's Real GDP Grows 7.8% in Q1 FY27, Exceeding Estimates

India’s real Gross Domestic Product (GDP) grew 7.8 per cent in the first quarter of the financial year 2026-27, accelerating from 6.9 per cent in the corresponding quarter of the previous year, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI). The growth rate was higher than the Reserve Bank of India’s earlier estimate of 7 per cent for the quarter. The latest figures also marked the highest first-quarter real GDP growth during the four-year period from 2023-24 to 2026-27. Real GDP at constant prices was estimated at Rs 81.36 lakh crore in Q1 FY27, compared with Rs 75.46 lakh crore in the same quarter of FY26. Nominal GDP, measured at current prices, rose 10.3 per cent to Rs 88.27 lakh crore from Rs 80 lakh crore in the year-ago quarter. Real Gross Value Added (GVA), which measures the value added by different sectors of the economy, grew 8.2 per cent during the quarter to Rs 73.82 lakh crore. The services sector remained a key contributor to growth, with real GVA in the tertiary sector expanding 10 per cent in Q1 FY27, compared with 8 per cent a year earlier. Financial, real estate, information technology and professional services recorded 12.1 per cent growth during the quarter. The secondary sector grew 8.6 per cent, up from 6.1 per cent in Q1 FY26, while manufacturing expanded 9.2 per cent. Production of electrical equipment grew 27 per cent, other transport equipment 19.5 per cent, computer, electronic and optical products 12.4 per cent, and machinery and equipment 9.1 per cent. Capital goods production also recorded strong growth, rising 15.2 per cent during the quarter compared with 8.8 per cent a year earlier. On the expenditure side, investment emerged as a major driver of growth. Gross fixed capital formation increased 11.9 per cent in Q1 FY27, compared with 5.8 per cent in the year-ago quarter. Household consumption grew 7.1 per cent, up from 6.8 per cent, while exports increased 12 per cent compared with 6 per cent in Q1 FY26. The momentum also extended into the first month of the second quarter. Industrial production grew 6.7 per cent in July, compared with 5.4 per cent a year earlier. During April-July, industrial production increased 6.3 per cent, while the Index of Core Industries grew 4.3 per cent compared with 1.5 per cent in the corresponding period last year. India’s combined merchandise and services exports were estimated at USD 80.14 billion in July, an increase of 13.31 per cent over the same month last year. Cumulative exports during April-July stood at an estimated USD 316.42 billion, up 13.16 per cent year-on-year. Bank credit also recorded strong growth in July. Credit to agriculture and allied activities increased 17 per cent year-on-year, while credit to industry and services grew 20 per cent and 22.9 per cent, respectively. The latest GDP figures come against the backdrop of geopolitical tensions and uncertainty in global trade. The government said India’s growth during the first quarter was supported by domestic demand as well as gains in manufacturing and services. The GDP estimates are subject to revision as additional data and updated information from source agencies become available. The government has also revised upwards the real GDP growth estimates for the previous three financial years. Growth for 2023-24 was revised from 7.2 per cent to 7.3 per cent, 2024-25 from 7.1 per cent to 7.2 per cent, and 2025-26 from 7.7 per cent to 7.8 per cent. The latest figures indicate broad-based momentum at the beginning of FY27, with investment, consumption, manufacturing, services and exports all recording growth. More recent indicators, including July industrial production and export data, suggest that economic activity has remained firm beyond the first quarter.