30 August, 2025 – New Delhi : Defying expectations of slower growth amid the US tariff fears, India’s GDP grew by 7.8 per cent during the first quarter of FY2025-26 (April-June), showcasing a robust economic performance, according to data released by the Statistics Ministry on Friday.
The economy achieved its highest growth in five quarters, surpassing the 7.4 per cent recorded in the March quarter and 6.5 per cent in the first quarter of the last financial year. The robust growth was driven by strong performances in the services and manufacturing sectors. Gross value added (GVA), a key measure of economic activity, rose 7.6 per cent — a six-quarter high — led by a 7.7 per cent surge in manufacturing, the sector’s best performance in five quarters. The services sector expanded by 9.3 per cent, an eight-quarter high, with all sub-segments showing sharp gains.
The agriculture and allied sectors showed a marked recovery, with the Real GVA growth rising to 3.7 per cent, compared to a sluggish 1.5 per cent in the corresponding quarter of the previous fiscal year. However, agriculture growth slowed to a four-quarter low. The mining and quarrying sector saw a contraction of 3.1 per cent, while the electricity, gas, water supply and other utility services sector grew modestly at 0.5 per cent.
On the expenditure side, gross fixed capital formation rose 7.8 per cent, reflecting increased capital spending. Private consumption grew 7 per cent, up from 6 per cent in the prior quarter, while government consumption expenditure rebounded to 7.4 per cent after a 1.8 per cent contraction in the March quarter. Lower inflation supported the strong real GDP growth, with nominal GDP growth slowing to 8.8 per cent, a three-quarter low, compared to 10.8 per cent in the previous quarter.
Addressing the media after releasing the data, Chief Economic Adviser V Anantha Nageswaran projected the GDP growth to remain within the targeted band of 6.3-6.8 per cent amidst downside risks from uncertainties related to the US tariffs. He said the domestic consumption growth could offset the US tariff-related losses.
“After seeing the resilience of the growth in the first quarter and the data for July, we are maintaining our growth range for the full year,” Nageswaran said. “There is some uncertainty with respect to the duration of the period for which the additional tariffs related to the Russian crude oil are due to last. But in general, the talks are going on and there is an expectation that we will see some kind of a resolution in the not-so-distant future,” he said.
Best in five quarters
The economy achieved its highest growth in five quarters
Higher than 7.4% in March quarter and 6.5% in the first quarter of last financial year
Growth driven by strong performances in the services and manufacturing sectors
Agriculture and allied sectors also show a marked recovery
Mining and quarrying sector see a contraction of 3.1%
The Tribune