Q1 FY26 GDP growth hits 7.8 percent, powered by services and construction

By: Team India Tracker

The latest numbers mark an improvement over the 7.4 percent growth recorded in the January–March 2025 quarter and represent the strongest performance in five quarters.

The National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) has released the quarterly estimates of Gross Domestic Product (GDP) for the April–June period (Q1) of financial year 2025–26. The data shows that India’s real GDP grew by 7.8 percent in the first quarter, up from 6.5 percent in the same period last year. Nominal GDP registered a growth of 8.8 percent in the quarter.

The latest numbers mark an improvement over the 7.4 percent growth recorded in the January–March 2025 quarter and represent the strongest performance in five quarters.

On the sectoral front, agriculture and allied activities expanded by 3.7 percent, significantly higher than the 1.5 percent growth seen in Q1 of the previous fiscal. Industry also delivered a strong performance, with manufacturing growing 7.7 percent and construction up 7.6 percent at constant prices. However, mining and quarrying contracted by 3.1 percent, while electricity, gas, water supply, and other utility services saw only a marginal 0.5 percent rise. Services (tertiary sector) remained the standout performer, surging 9.3 percent compared to 6.8 percent in the same quarter last year.

In absolute terms, real GDP for Q1 2025–26 is estimated at ₹47.89 lakh crore, against ₹44.42 lakh crore in Q1 of 2024–25. Nominal GDP is pegged at ₹86.05 lakh crore, up from ₹79.08 lakh crore a year earlier. Real Gross Value Added (GVA) stood at ₹44.64 lakh crore, registering a 7.6 percent rise, while nominal GVA was estimated at ₹78.25 lakh crore, up 8.8 percent year-on-year.

Government spending provided a boost, with Government Final Consumption Expenditure (GFCE) rebounding to post 9.7 percent growth in nominal terms, compared to 4.0 percent in the year-ago quarter. In real terms, GFCE grew 7.4 percent, reversing a contraction of 0.3 percent in the corresponding period last fiscal. Private consumption (PFCE) rose 7.0 percent, slightly lower than the 8.3 percent growth reported in Q1 of 2024–25. Investment activity also gained traction, as Gross Fixed Capital Formation (GFCF) grew 7.8 percent at constant prices, up from 6.7 percent in the same quarter last year.