Indian economy grows 7.8 pc in April-June quarter, boosted by farm sector

The Indian economy grew 7.8 per cent in April-June — the highest in five quarters — before the disruptive US tariffs were imposed. The GDP growth in the first quarter of the ongoing fiscal year was mainly due to a good showing by the farm sector, per government data.

India remains the fastest-growing major economy, as China's GDP growth in the April-June period was 5.2 per cent.

The previous highest GDP growth was 8.4 per cent in January-March of 2024, per the data.

Farm, manufacturing sectors

The agriculture sector recorded a 3.7 per cent growth, up from 1.5 per cent in the April-June period of 2024-25, per National Statistical Office (NSO) data released on Friday (August 29). The NSO operates under the Ministry of Statistics and Programme Implementation (MoSPI).

However, manufacturing sector growth marginally increased to 7.7 per cent in the first quarter of FY26 compared to 7.6 per cent in the year-ago period.

Earlier this month, the Reserve Bank of India had projected real GDP growth for 2025-26 at 6.5 per cent, with Q1 at 6.5 per cent, Q2 at 6.7 per cent, Q3 at 6.6 per cent, and Q4 at 6.3 per cent.

Key highlights

♦ Real GDP has been estimated to grow by 7.8% in Q1 of FY 2025-26 over the growth rate of 6.5% during Q1 of FY 2024-25.

♦ Nominal GDP has witnessed a growth rate of 8.8% in Q1 of FY 2025-26.

♦ Agriculture and Allied Sector has observed the Real GVA growth rate of 3.7%, as compared to the growth rate of 1.5% registered in Q1 of the previous financial year.

♦ Secondary Sectors, prominently Manufacturing (7.7%) and Construction (7.6%) Sectors registered above 7.5% growth rate at Constant Prices in this quarter.

♦ Mining & Quarrying (-3.1%) and Electricity, Gas, Water Supply and Other Utility Services Sector (0.5%) gave seen moderated real growth rate during Q1 of FY 2025-26.

♦ Tertiary Sector (9.3%) recorded substantial growth rate at constant prices in Q1 of FY 2025-26, over the growth rate of 6.8% in Q1 of FY 2024-25.

♦ Government Final Consumption Expenditure (GFCE) has bounced back, registering 9.7% growth rate in nominal terms during Q1 of FY 2025-26, over the growth rate of 4.0% in Q1 of FY 2024-25.

♦ Real Private Final Consumption Expenditure (PFCE) saw 7.0% growth rate during Q1 of FY 2025-26 as compared to the 8.3% growth rate in the corresponding period of previous financial year.

♦ Gross Fixed Capital Formation (GFCF) recorded 7.8% growth rate at constant prices, over the growth rate of 6.7% in Q1 of FY 2024-25.