India's economy grows 7.8% in Q1 FY26, hitting 15-month high
What's the story
India's economy expanded by a robust 7.8% in the first quarter (April-June) of FY26, hitting a five-quarter high, according to estimates released by the Ministry of Statistics and Programme Implementation (MoSPI). The latest figures are higher than the Reserve Bank of India's (RBI) projection of 6.5% for Q1 FY26. Last year during this time, the GDP growth rate was at 6.5%.
Economic indicators
Nominal GDP for June quarter at ₹86.05 trillion
India's nominal GDP for the June quarter grew by 8.8% to ₹86.05 trillion. The Real Gross Value Added (GVA) at constant prices, which indicates the value of goods and services produced, grew by 7.6% to ₹44.64 trillion. Meanwhile, nominal GVA also expanded by 8.8% to ₹78.25 trillion during this period, reflecting a healthy economic performance across various sectors of the economy.
Sector performance
Services sector grew by 9.3%
The services sector led India's economic growth in Q1 FY26, growing by 9.3%. This is a significant increase from the 6.8% growth rate during the same period last year. The manufacturing and construction sectors also witnessed strong growth rates of 7.7% and 7.6%, respectively, during this period. The agriculture sector grew by 3.7% in Q1 FY26, an improvement from the 1.5% growth seen in Q1 FY25. However, the mining sector contracted by 3.1%, while utilities saw muted growth of 0.5%.
Expenditure trends
PFCE and GFCE growth rates
Real Private Final Consumption Expenditure (PFCE) grew by 7% in Q1 FY26, down from 8.3% last year. PFCE indicates spending by resident households and non-profit institutions serving households on goods and services. Meanwhile, Government Final Consumption Expenditure (GFCE) grew by 9.7% during this period compared to just 4% in Q1 FY25, indicating increased government spending on goods and services to meet community needs directly.