The data, released by the National Statistics Office (NSO) on Monday, positively surprised analysts and pleased the government. The Indian economy grew at 7.8% in the first quarter (April-June 2026) of the current fiscal year braving what has been described as the largest oil shock in the history of capitalism.
The collective strength of our people ensured India delivered such growth despite oil price shocks and supply chain issues in the midst of global uncertainties. “India’s exemplary GDP growth of 7.8% during Q1 of FY 2026-27 is a herculean feat.
Doomsayers were doomed and India bloomed…yet again!”, Prime Minister Narendra Modi said in a post on X.
Finance minister Nirmala Sitharaman also attributed the performance to the government’s reforms and economic management. “The credit for this strong performance goes to the people of India and their hard work. The latest numbers should not, however, be seen as evidence that the West Asia war did not adversely affect India’s economic momentum. This means that growth did slow down after the outbreak of the war. Chinoy’s note attributed the impressive growth performance to three factors. “GDP growth surprised to the upside, but still slowed vs an upwardly revised Q4FY26.
The latest GDP data, which now incorporates producer price indices, has also made an upward revision to the GDP numbers in the quarter ending March 2026, which were published in June. March quarter growth now stands at 8.6% compared to 7.8% according to the data released by the NSO in June. This outperformance poses upside risk to our FY27 growth forecast of 6.8% y/y.
Reforms undertaken by the NDA Government, together with an agile management of the economy, are bearing results,” Sitharaman said on social media. “Growth continues to be supported by resilient domestic demand, sustained expansion in manufacturing and services activity, and robust exports, reaffirming India’s position as the world’s fastest-growing major economy”, RBI’s MPC had said in its latest resolution published on August 5. A joint fiscal-monetary-regulatory stimulus in 2025, which included tax cuts and interest rate reduction, acceleration in exports due to currency depreciation, reduction in US tariffs and higher global growth; and a “swift and nimble” policy response to the supply shock for petroleum products. As growth outpaced the RBI’s estimate, we acknowledge the risk of a December hike, but that is not our base case”, Aastha Gudwani, India Chief Economist at Barclays, said in a note.
Strong high frequency data – autos, credit, exports and corporate earnings – have been presaging this outcome for a while”, Sajjid Chinoy, Chief India Economist at JP Morgan, had said in a note released on Sunday.
