Newsletter
India’s gross domestic product (GDP) grew 7.8% in the first quarter of FY27, up from 6.9% in the same quarter last year.
Breaking it down: India’s economy managed to stay resilient despite geopolitical tensions, higher energy prices and uncertainty around global trade.
Domestic demand did much of the heavy lifting, while government spending on infrastructure, manufacturing, construction and exports also helped drive growth.
Sector-wise: agriculture grew 3.6% in the June quarter, despite the delayed onset of the monsoon, compared with 4.4% growth in the same quarter last year.
Manufacturing growth accelerated to 9.2% from 8.3% a year ago. Among services, the financial, real estate and IT sector recorded double-digit growth of 12.1%, up from 8.8% in the same period last year.
Nominal GDP grew 10.3% in Q1, compared with 8.1% a year earlier. According to analysts, corporate earnings were also broadly positive, with revenue growth across listed companies remaining resilient. However, higher energy prices weighed on the profitability of oil marketing companies.
What’s the risk: Inflation remains a key concern. Elevated energy prices, uncertainty around the Strait of Hormuz and uneven monsoon could add to price pressures in the coming months.
For now, the first-quarter numbers give FY27 a strong start. The next few quarters will show whether this momentum can be sustained through stronger private investment, consumption and exports, or whether external pressures begin to weigh more heavily on growth.
