India's GDP grows 7.8% in Q1 FY27, beats expectations
What's the story
India's economy grew by 7.8% in the April-June quarter of FY2026-27, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) today. The growth rate is higher than economists' expectations. A Reuters poll had predicted a GDP growth of 7.1% for the period, while a Moneycontrol poll had estimated it at 7.3%.
Economic resilience
Real GDP at constant prices for Q1 FY27
The real GDP at constant prices for Q1 FY27 was pegged at ₹81.36 lakh crore, up from ₹75.46 lakh crore in the same quarter last year.
The nominal GDP also saw a significant rise of 10.3% to ₹88.27 lakh crore, compared to ₹80 lakh crore last year.
These figures underscore India's economic resilience amid global challenges such as the US-Iran conflict, rising crude oil prices, trade uncertainties, and financial market volatility.
GVA performance
Gross Value Added (GVA) numbers for Q1 FY27
The Gross Value Added (GVA) at basic prices grew by an impressive 8.2% in Q1 FY27 to ₹73.82 lakh crore, up from ₹68.21 lakh crore in the year-ago period.
The nominal GVA also saw a rise of 11.5% to ₹80.53 lakh crore.
These numbers indicate that domestic economic activity remained stronger than expected despite fears of higher energy costs and geopolitical disruptions affecting output levels.
Methodological changes
New national accounts series with 2022-23 as base year
The Q1 numbers are significant as they come under India's new national accounts series with 2022-23 as the base year.
The updated estimates use revised data and methodologies, including the new Producer Price Index, revised Index of Industrial Production, and administrative datasets.
Despite external risks such as rising global oil prices due to US-Iran conflict and pressure on rupee, domestic economic activity has shown resilience in this quarter.
Economic outlook
Sensex falls over 300 points amid geopolitical concerns
The strong GDP print provides some reassurance about the underlying strength of domestic economic activity.
However, if high oil prices continue to persist, the outlook for upcoming quarters could be more challenging.
The Sensex fell over 300 points while Nifty ended below 24,100 today as investors remained wary of crude prices, global interest rates, and geopolitical risks.