The real GDP grew 7.8 per cent in the first quarter of FY 2025-26, according to data released by the National Statistics Office (NSO) on Friday. This is higher than the 6.5 per cent growth recorded in the same quarter a year ago. The Q1 FY26 GDP data beat the estimate of 6.7 per cent amid tariff tensions and trade-related uncertainties.
Real GDP stood at Rs 47.89 lakh crore in April-June 2025 compared with Rs 44.42 lakh crore in the same period last year. Nominal GDP at current prices was estimated at Rs 86.05 lakh crore, marking an 8.8 per cent rise from Rs 79.08 lakh crore in Q1 FY25.
At current prices, nominal GDP stood at Rs 86.05 lakh crore in Q1 FY26, compared with Rs 79.08 lakh crore in Q1 FY25, marking an expansion of 8.8 per cent.
Services sector driving momentum
The services sector emerged as the biggest growth driver, expanding by 9.3 per cent in Q1 FY26 compared with 6.8 per cent in the same quarter last year. The government noted that buoyant activity in trade, hotels, transport, financial services and public administration pushed the momentum further.
Rural economy witnessing revival
Agriculture and allied activities posted a growth of 3.7 per cent, an improvement over the 1.5 per cent growth seen in Q1 of FY25. The recovery comes on the back of better output in food grains, oil seeds and livestock products.
Industry offered a mixed picture.
Manufacturing grew by 7.7 per cent, while construction expanded 7.6 per cent. On the other hand, mining and quarrying contracted by 3.1 per cent and the electricity, gas, water supply and other utility services segment registered a marginal growth of 0.5 per cent.
Consumption cools, investment momentum steady
Private consumption, which makes up a large share of GDP, grew 7.0 per cent in Q1 FY26, slower than the 8.3 per cent growth seen in the same period last year. Gross Fixed Capital Formation, a measure of investment, increased by 7.8 per cent compared with 6.7 per cent a year ago.
Government spending provided a strong boost. Government Final Consumption Expenditure surged 9.7 per cent in nominal terms, recovering sharply from 4.0 per cent growth in the previous year’s first quarter.
