August 29, 2025: India’s economy grew at a robust 7.8 per cent in the first quarter of fiscal year 2025–26 (April–June), outperforming most analyst expectations and the Reserve Bank of India’s projections. This growth was recorded before the full impact of newly introduced US tariffs, which are expected to influence trade figures in future quarters.
The growth was broad-based, with several sectors contributing. Manufacturing increased by 7.7 per cent, reflecting strong industrial activity and rising domestic demand. The construction sector expanded by 7.6 per cent, supported by ongoing infrastructure projects. Agriculture grew by 3.7 per cent, aided by favorable monsoon conditions and higher rural consumption.
Economists said the figures highlight the resilience of India’s domestic economy. “The data shows strong internal demand and effective policy measures. While international trade pressures may affect exports later, the economy remains fundamentally strong,” said Dr. Arvind Rao, a senior economist.
Exports recorded moderate growth in the quarter, though sectors such as textiles, electronics, and pharmaceuticals could see slower growth once the US tariffs are fully applied. Government initiatives, including infrastructure investment and support for manufacturing, have helped maintain investor confidence.
The Reserve Bank of India indicated that it will continue monitoring global developments while keeping inflation under control. Strong domestic demand, government spending on infrastructure, and policy support are expected to sustain India’s growth momentum throughout the year.
The 7.8 per cent GDP expansion in Q1 FY26 confirms India’s position as one of the fastest-growing major economies globally, despite potential external challenges.
