India's gross domestic product (GDP) grew 7.8% in the past quarter, significantly exceeding Reuters' survey forecast of 7.1%, though slower than the 8.6% recorded in the first three months of 2026.
According to the Ministry of Statistics and Program Implementation of India, while agriculture and related sectors saw a slowdown, manufacturing and services experienced significant improvement in the previous quarter.
Previously, the Reserve Bank of India (RBI) had also projected first-quarter growth for the fiscal year (April-June) at only 7%, attributing it to the "volatile global economic environment" impacting domestic economic activity.
Dhiraj Nim, an economist at ANZ Research, noted that India's economy has surpassed expectations for the 12th consecutive quarter. "Growth is driven by investment and exports, reflecting a balance between domestic and external demand," he stated.
According to Tanay Dalal, senior vice president of research at Axis Bank in Mumbai, the better-than-expected results demonstrate the economy's resilience, supported by government measures through subsidies and investment spending.
Sakshi Gupta, chief economist at HDFC Bank, suggested that higher output offset input cost pressures. Sectors such as manufacturing, electricity, and gas saw growth of nearly 9%. The services sector, including finance, real estate, and professional services, expanded by as much as 12%. HDFC Bank has decided to raise its full-year growth forecast for India from 6.8% to 7%.
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Garment workers at Bindal Silk Mills in Surat, Gujarat, India, on 16/6. *Photo: Reuters*
Radhika Rao, chief economist at DBS Bank in Singapore, shared this view, stating that India's full-year growth is highly likely to exceed 7%. However, the trade outlook will be overshadowed by persistently high energy prices.
"Most of the current risks do not stem from a weakening domestic demand but rather from prolonged high oil prices, a depreciating rupee, and tighter global financial conditions," she observed.
By Phien An (based on Reuters, CNBC)
