India, Sept. 1 -- The Government of India has issued a release:
India's economy began 2026-27 on a strong note, with real GDP growth accelerating to 7.8% in Q1, riding on manufacturing and services, while real GVA rose 8.2%. Investments rose by 11.9%; household consumption grew 7.1% and exports grew by 12.0%. This momentum continued into July, with industrial production up 6.7%, while cumulative merchandise and services exports during April-July rose 13.16% year-on-year. Credit to industry and services grew 20.0% and 22.9%, respectively, in July.
Growth Accelerates in the First Quarter
Gross Domestic Product (GDP) is the value of final goods and services produced in the domestic economy in an accounting period.
Gross Value Added (GVA) measures the individual contribution of producers, industries or sectors to the economy.
Revised Estimates Strengthen the Growth Picture
Table-1: Revised Real GDP Growth Estimates
Financial Year
Earlier Estimate
Revised Estimate
2023-24
7.2%
7.3%
2024-25
7.1%
7.2%
2025-26
7.7%
7.8%
Source: Ministry of Statistics & Programme Implementation (MoSPI)
Basis of the Revised Estimates
Trends Across Key Expenditure Components
Table-2: Key Expenditure Components of Real GDP
Component
Interpretation
Q1 2025-26
Q1 2026-27
Gross Fixed Capital Formation (GFCF)
Domestic funding of investment
5.8%
11.9%
Private Final Consumption Expenditure (PFCE)
Spending by households on goods and services
6.8%
7.1%
Exports
Goods and services supplied to the rest of the world
6.0%
12.0%
Source: Ministry of Statistics & Programme Implementation (MoSPI)
Growth Extends Across Major Sectors
Table-3: Key Manufacturing Categories Record Notable Gains
Manufacturing category
Q1 2025-26
Q1 2026-27
Electrical Equipment
9.7
27.0
Other Transport Equipment
3.8
19.5
Computer, electronic and optical products
8.8
12.4
Machinery and equipment
6.6
9.1
Source: Ministry of Statistics & Programme Implementation (MoSPI)
Industrial Activity Remains Firm
Strong Export Performance
Credit Expands Across Major Sectors
Policy measures introduced during 2026 have complemented these economic trends, spanning manufacturing, energy security, trade and investment, and agriculture.
Energy Security
Trade and Investment
Agriculture: Farm Income and Production Support
The annual revised estimates reflect the use of new price and production indices with base year 2022-23. This includes the Output Producer Price Index (PPI) and Banking Services Price Index (BkSPI). Updated administrative data from different sources were also incorporated.
(Year-on-year IIP growth (%))
Manufacturing and Industry
To read more on National Account Statistics revisions, please refer to: Counting What Counts: Strengthening India's National Accounts and Core Economic Statistics
India's Macroeconomic Position
India entered 2026-27 amid persistent geopolitical tensions and uncertainty around global trade. Despite these external pressures ,real GDP grew by 7.8% in Q1 2026-27. The outcome marked the highest Q1 real GDP growth during the four-year period from 2023-24 to 2026-27. This has been supported by buoyant domestic demand and gains in manufacturing and services.
The International Monetary Fund (IMF) has also highlighted India's role in the global economy. In July 2026, it described India as one of the world's fastest-growing economies and a key engine of global growth.
India's sovereign credit assessment further reflects this confidence. In August 2026, S&P Global Ratings affirmed India's 'BBB/A-2' sovereign ratings with a Stable Outlook. This followed the upgrade of its long-term rating to 'BBB' in 2025, after an 18-year gap.
A Stronger Start to 2026-27
Economic growth strengthened in the first quarter (Q1) of 2026-27. This outcome has exceeded the Reserve Bank of India's estimate of 7.0% for the quarter.
Real GDP has been revised upwards for the previous three financial years. The revisions show that the first-quarter performance follows a stronger growth trajectory than previously estimated.
Composition of Growth Drivers
Economic activity in the first quarter was supported by a sharp rise in investment, firm household consumption and stronger exports.
The strength in expenditure was also reflected on the production side, with the tertiary and secondary sectors expanding at a faster pace.
Recent Indicators Signal Continued Momentum
Bank credit growth strengthened across major sectors in July 2026.
Recent Policy Measures Supporting Growth
These measures build on a decade of policy initiatives including Make in India, Production Linked Incentive (PLI) schemes, PM-KISAN, the Export Promotion Mission and others.
Conclusion
India's economic performance at the start of 2026-27 reflects broad-based momentum across key areas of the economy. Investment has accelerated, household consumption has remained firm, while manufacturing, services and exports have provided additional support.
More recent indicators show that this strength has carried beyond the first quarter. Continued government support through various policy measures has also helped maintain the pace of economic activity.
PIB Research
References
Ministry of Statistics & Programme Implementation:
https://www.pib.gov.in/PressReleaseDetail.aspx?PRID2304949®48&lang1
https://www.pib.gov.in/PressReleaseDetail.aspx?PRID2304948®48&lang1
https://www.mospi.gov.in/uploads/announcements/announcements_1772117257791_84ae898f-7be2-4b7d-a135-565e1a809513_FAQ_GDP_26022026_1902.pdf
https://www.mospi.gov.in/sites/default/files/publication_reports/national_accounta_0.pdf
https://www.pib.gov.in/PressReleaseDetail.aspx?PRID2304222®48&lang1
https://www.pib.gov.in/FaqDetails.aspx?ModuleId4&NoteId157582&lang1®48
Ministry of Finance:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2280989&lang1®48
Ministry of Commerce & Industry:
https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID2301558&lang2®48
https://www.pib.gov.in/PressReleasePage.aspx?PRID2298878&lang1®48
https://www.pib.gov.in/PressReleasePage.aspx?PRID2285085&lang1®3
https://www.pib.gov.in/PressReleasePage.aspx?PRID2294775&lang1®6
Ministry of Electronics & IT:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2284796&lang2®48
Ministry of Chemicals and Fertilizers:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2288866&lang1®3
https://www.pib.gov.in/PressReleasePage.aspx?PRID2288824&lang1®48
Ministry of Petroleum & Natural Gas:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2295494&lang1®1
https://www.pib.gov.in/PressReleaseDetail.aspx?PRID2301012®48&lang1
Ministry of New and Renewable Energy:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2292465&lang1®1
Ministry of Agriculture & Farmers Welfare:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2292460&lang1®6
https://www.pib.gov.in/PressReleasePage.aspx?PRID2260618&lang3®3
https://www.pib.gov.in/PressReleasePage.aspx?PRID2258187®48&lang2
Union Cabinet:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2284789&lang1®20
https://www.pib.gov.in/PressReleasePage.aspx?PRID2258114&lang1®3
https://www.pib.gov.in/PressReleasePage.aspx?PRID2292445&lang1®48
https://www.pib.gov.in/PressReleasePage.aspx?PRID2260621&lang1®3
https://www.pib.gov.in/PressReleasePage.aspx?PRID2253242&lang1®3
https://www.pib.gov.in/PressReleasePage.aspx?PRID2250032&lang1®20
Cabinet Committee on Economic Affairs (CCEA):
https://www.pib.gov.in/PressReleasePage.aspx?PRID2284800&lang1®3
Reserve Bank of India (RBI):
https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/0BULL25082026F2C1FCCDD5CBB4F6EAE15BCBB541FC331.PDF
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid63287
https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid63478
International Monetary Fund (IMF):
https://www.imf.org/en/news/articles/2026/07/09/tr-07092026-imf-press-briefing-transcript-july-09-2026
United Nations (UN):
https://unstats.un.org/unsd/nationalaccount/glossresults.asp?gID232&
PIB Archives:
https://www.pib.gov.in/PressReleasePage.aspx?PRID2297792&lang1®3
https://www.pib.gov.in/FactsheetDetails.aspx?Id150624&lang1®48
Others:
https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3618793
India's GDP Performance
Disclaimer: Curated by HT Syndication.
