GDP development in Q1 quickens to five-quarter excessive of seven.8%, buoyed by cross-sector power

India’s financial development fee within the first quarter (April-June) of the present monetary yr quickened to a five-quarter excessive of seven.8%, pushed by robust performances by sectors reminiscent of manufacturing, development, and companies, authorities information confirmed. 

Growth within the Gross Domestic Product (GDP), as proven by information launched by the Ministry of Statistics and Programme Implementation on Friday (August 29, 2025), was beforehand faster throughout January-March 2024. 

The 7.8% development recorded in Q1 of this monetary yr was greater than the 6.5% predicted by the Reserve Bank of India as lately as August 6.

The authorities additionally sought to ease worries about development slowing within the coming quarters on account of the 50% tariffs imposed by the U.S. on its imports from India. 

“We do see the momentum persevering with,” Chief Economic Advisor (CEA) V. Anantha Nageswaran stated throughout a press briefing following the discharge of the info. “There can be some affect on home spending due to uncertainties within the export sectors, that are affected due to publicity to the U.S., as these models could take some choices relating to their labour power.”

“But we do count on the affect on demand to be of a really modest nature,” Mr. Nageswaran added. “Overall mixture demand development within the economic system ought to maintain up particularly due to the federal government’s resolution to decrease the oblique tax charges.”

The CEA additionally expressed confidence that the short-term dip in client demand within the run-up to the GST Council assembly would reverse itself properly earlier than the upcoming pageant season. He additionally stated the federal government was retaining its development estimate for the complete monetary yr.

Growth within the manufacturing sector quickened to 7.7% within the April-June 2025 quarter, approaching prime of a excessive base of seven.6% in the identical quarter of the earlier yr. This was additionally quicker than the 4.8% development the sector noticed within the January-March 2025 quarter.

The development sector grew at 7.6%, on a excessive base of 10.1% in Q1 of final yr. The Electricity, Gas, Water Supply and Other Utility Services sector, nonetheless, noticed development decelerate sharply to 0.5%, from 10.2% in the identical quarter of the earlier yr.

The quarter’s GDP development was additionally propelled by the companies sector, which on a mixed foundation grew 9.3%, quicker than the 6.8% seen in the identical quarter of final yr, or the 7.3% development within the instantly previous quarter. 

Within this, the Public Administration, Defence and Other Services sector noticed the expansion accelerating to a three-year excessive of 9.8%, approaching prime of a 9% development in Q1 of the earlier yr. 

The Financial, Real Estate and Professional Services sector grew at 9.5%, a two-year excessive. Similarly, the Trade, Hotels, Transport, and Communication Services sector grew at 8.6%, additionally a two-year excessive.