Q1fy26 GDP growth: Five quarter growth gives hope for continuous momentum

The Indian economy grew at a higher rate than 7.8 % in the first quarter of the fiscal year 2025-26, giving some hope that growth can continue in the expected path. However, concerns about the 50 % definition impact remain imposed by the United States.

According to the official estimates issued on Friday, the gross domestic product of India grew at the highest level of five quarters by 7.8 % in April to the quarter of June 2025 compared to 6.5 % in the first quarter of last financial and 7.4 % in the fourth quarter of last financial. The total added value of basic prices was expanded by 7.6 % in the first quarter of the fiscal year compared to 6.5 % last year.

“The real GDP has grown 7.8 % in the Q1 FY26, which reflects the momentum of reinforcement in the economy, and is based on the basics of strong macroeconomic economy. High frequency indicators were signing green numbers on the high side. You can also see, expand the width scope (7.0). Sources in the Ministry of Finance at the level of the first quarter of performance. Work today.

The Indian Reserve Bank linked the GDP 6.5 % of this fiscal year, while the 2024-25 Economic Survey expected that the economy would grow by 6.3 % -6.8 % in the current fiscal year.

The chief economic consultant against Anantha Nageswaran indicated that the high frequency indicators for the month of July 2025 indicate that there is an occurrence in the first quarter of economic momentum and domestic demand, which is expected to be strengthened in the next quarter with the beginning of the celebration period and changes to good commodity tax and services alongside the normal normal winds above.

He said that the tariff of sanctions from the United States is seen as short -lived, adding that the industry is also looking to diversify to other markets. “While there is some uncertainty due to concerns about tariff … but in public talks continues and we see a kind of decision in the non -different future. We believe that the goal of growth in the current fiscal year, especially in the strong offer for the first quarter of the fiscal year 26, has been issued 6.3 % -6.8 %.”

He also said that it is difficult to give an accurate impact on the US tariff on growth at this stage due to the secondary impact and the implications of.

Noting that the Prime Minister has also called for the use of this position as an opportunity to consider local reforms, cancel restrictions, rationalize prices and procedures in commodity and services tax, and enhance the competitiveness of their products, as he assured collectively, between public and private sector initiatives, we can turn the situation into a long -term opportunity.

The growth was wide with the manufacturing sector that prevents 7.7 % growth and construction expansion by 7.6 %. Services have also grown at a strong pace of 9.3 % with all sectors of trade, finance and public management that record high growth. While trade, hotels, transportation and communications expanded by 8.6 %, banking and financing services, real estate grew by 9.5 % and government spending by 9.8 %.

Both consumption and investments grew at a strong pace, although the expenses of private consumption have grown by 7 % slower in the first quarter of the fiscal year compared to 8.3 % a year ago. The final consumption of the government, which contracted 0.3 % in the first quarter of the last financial, was expanded by 7.4 % in the quarter of June 30. The total formation of fixed capital, which is a Belwether for investments, has arisen by 7.8 % faster in the first quarter of the fiscal year compared to 6.7 % last year.

But there is an expectation that the local demand will submit stronger with income tax cuts, reduce 100 rates to reduce the ribau rate and the proposed reduction in the commodity and services tax.

DK Srivastava, chief policy consultant, EY India indicated that the only weak part of the demand includes exports of 6.3 %, less than the growth of imports by 10.9 % in the first quarter of the 26th fiscal year. “As a result, the net exports contribute to the growth of the real real GDP negative at (-) 1.4 % after showing a positive contribution rate 2.2 % in the last four quarters, “indicated.

He said that to move forward, it is possible that the situation related to clear exports will continue to face challenges and stressed that the center should continue to provide financial support for total growth by focusing on government capital expenditures and activating the efforts made to improve the performance of the government’s tax revenues.

Madan Sabnafis, chief economist, Barouda Bank, indicated that the share of exports in GDP remained unchanged by 20.9 %, which does not indicate any front load of export to the United States of America in this period. He said: “The economy appears around the clock a 6.5 % growth rate for this year despite the effects of customs tariffs that may affect growth by 0.2-0.4 %.”

Paras Jasri, assistant director in India and Research Classes in India, said it is very important for the center to maintain CAPEX momentum and carry their CAPEX plans (as in fiscal year 24) due to unprecedented volatility and uncertainty in the global economic environment. He said: “This support will provide the need for the weak investment file,” adding that moving forward, a decrease in inflation in retail, cash dilution and rationalization of commodity tax rates and services is well affected by demand for consumption.

He also said: “The gradual impact of the decline in inflation is already reflected. It can cast a high tariff in its shadow on economic recovery and will have an impact on the growth of the 26th fiscal year as well,” adding that India will remain a major growth engine and help the world to move in the current treacherous waters.

Obaysna Bharadwaj, chief economist at Kotak Mahindra Bank, also expressed his warning on his way forward amid expected slowdown in exports of high definitions in addition to postponing production before GST price discounts.