India records 7.8% growth in GDP in Q1, performs better than projection

In a major boost for the Indian economy, the country’s gross domestic product (GDP) recorded a robust growth of 7.8% in the first quarter ended June 30, 2025. This impressive figure has surpassed all expectations, as most analysts and institutions, including the Reserve Bank of India (RBI), had projected the growth to be in the range of 6.5-7%. The performance signals a strong and resilient economic recovery, positioning India as a key driver of global expansion.

The official data, released by the Ministry of Statistics & Programme Implementation on August 29, shows that the real GDP, or GDP at constant prices, is estimated at Rs 47.89 lakh crore for Q1 of FY 2025-26. This is a significant jump from Rs 44.42 lakh crore recorded in the same quarter of the previous fiscal year, which had a growth rate of 6.5%. The consistent acceleration in growth, from 7.4% in the previous quarter, reflects a positive and sustained momentum.

The official data also highlighted the performance of nominal GDP, which accounts for inflation. In the first quarter of the current fiscal year, the nominal GDP witnessed a growth rate of 8.8%. This figure, while still strong, indicates that the real growth is not solely driven by inflationary pressures but by genuine economic activity and an increase in the output of goods and services.

The primary engine behind this remarkable performance was the services sector. According to the National Statistical Office (NSO), the real Gross Value Added (GVA) grew by a robust 7.6% during the quarter. Real GVA, which measures the value of output minus the cost of intermediate consumption, rose to Rs 44.64 lakh crore from Rs 41.47 lakh crore in Q1 FY25, with the services sector being the main driver of this expansion.

On a sectoral basis, the services sector showed remarkable growth of 9.3% in GVA. Within this, the financial, real estate, and professional services sector grew by a strong 9.5%, while trade, hotels, transport, and communication saw an 8.6% growth. Furthermore, the manufacturing sector also registered a healthy growth of 7.7%, and construction grew at a strong 7.6%, signaling sustained industrial and infrastructure activity.