New Delhi, September 01, 2026 : India’s economy recorded a stronger-than-expected performance in the opening quarter of FY27, with real GDP growing 7.8%, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).
The latest growth figure is higher than the 6.9% recorded in Q1 FY26 and also exceeded the 7% growth projection earlier made by the Reserve Bank of India (RBI). It marks the strongest first-quarter real GDP growth recorded between FY24 and FY27.
At constant prices, India’s real GDP was estimated at ₹81.36 lakh crore in Q1 FY27, compared with ₹75.46 lakh crore during the corresponding period of the previous financial year. At current prices, nominal GDP rose 10.3% to ₹88.27 lakh crore, from ₹80 lakh crore a year earlier.
Real Gross Value Added (GVA), which reflects the value generated across different sectors of the economy, increased 8.2% during the quarter to ₹73.82 lakh crore.
Manufacturing and services drive economic expansion
The services sector continued to provide significant support to overall economic growth. Real GVA in the tertiary sector increased 10% in Q1 FY27, compared with 8% during the same quarter last year.
Financial, real estate, information technology and professional services registered particularly strong growth of 12.1% during the quarter.
The secondary sector also strengthened, growing 8.6%, compared with 6.1% in Q1 FY26. Within this segment, manufacturing recorded 9.2% growth.
Several manufacturing categories posted notable increases. Production of electrical equipment rose 27%, while other transport equipment grew 19.5%. Computer, electronic and optical products recorded 12.4% growth, and machinery and equipment increased 9.1%.
Capital goods production also gained momentum, expanding 15.2%, compared with 8.8% in the year-ago period.
Investment and consumption add to growth momentum
Investment emerged as one of the major contributors to the quarter’s economic performance. Gross fixed capital formation increased 11.9%, significantly higher than the 5.8% growth recorded in Q1 FY26.
Household consumption also improved, registering 7.1% growth, compared with 6.8% a year earlier.
Exports showed a notable acceleration as well, rising 12% during the quarter against 6% in Q1 FY26.
Economic activity remained firm even after the first quarter. Industrial production grew 6.7% in July, compared with 5.4% during July last year.
For the April-July period, industrial production increased 6.3%, while the Index of Core Industries recorded 4.3% growth, compared with 1.5% in the corresponding period last year.
Exports and bank lending maintain momentum
India’s external trade also showed continued strength. Combined merchandise and services exports were estimated at $80.14 billion in July, representing a 13.31% increase from the same month last year.
Between April and July, cumulative exports were estimated at $316.42 billion, up 13.16% year-on-year.
Credit growth remained strong across key sectors of the economy. Bank credit to agriculture and allied activities expanded 17% year-on-year in July. Credit to industry increased 20%, while lending to the services sector rose 22.9%.
Growth continues despite global challenges
The latest economic data comes at a time of continuing geopolitical tensions and uncertainty surrounding global trade.
According to the government, the Q1 performance was supported by resilient domestic demand along with stronger activity in the manufacturing and services sectors.
However, the GDP figures remain provisional and may undergo revisions as additional information and updated data from various source agencies become available.
MoSPI has also revised its estimates for economic growth in the previous three financial years. Growth for FY24 has been revised from 7.2% to 7.3%, while FY25 has been revised from 7.1% to 7.2%. The estimate for FY26 has also been raised from 7.7% to 7.8%.
The Q1 FY27 figures point to broad-based economic momentum, with investment, household consumption, manufacturing, services and exports all contributing to growth. Early indicators from the second quarter, including July’s industrial production and export figures, suggest that economic activity has continued to remain robust.
