India's Economy Grew 7.8 Per Cent in April to June 2026, Above the Reserve Bank's 7 Per Cent Forecast, With Investment Up 11.9 Per Cent and Services Up 10 Per Cent

India’s real GDP grew 7.8 per cent in the April to June quarter of 2026, the first quarter of the financial year 2026-27 (April 2026 to March 2027), according to the Ministry of Statistics and Programme Implementation (MoSPI) on 31 August 2026. Real GDP, which removes the effect of price changes, was ₹81.36 lakh crore (₹81.36 trillion), against ₹75.46 lakh crore a year earlier. The Reserve Bank of India had projected 7.0 per cent for the quarter on 5 August, and CNBC reported that a Reuters poll of economists expected 7.1 per cent.

Investment led on the spending side. Gross fixed capital formation, which is spending on buildings, machinery and other lasting assets, grew 11.9 per cent at constant prices, against 5.8 per cent in April to June 2025. On the output side, services grew 10.0 per cent and the factory, power and construction group 8.6 per cent. What follows goes through the ministry’s note, as read on 29 October 2026. It is a first estimate, and MoSPI says it can be revised.

The ministry’s numbers and the forecasts they beat

Nominal GDP, measured at the prices of the day, rose 10.3 per cent to ₹88.27 lakh crore from ₹80.00 lakh crore. Gross value added (GVA, the value of output minus the inputs used up, before taxes on products are added) rose 8.2 per cent in real terms to ₹73.82 lakh crore. GDP grew more slowly than GVA because net taxes on products grew 3.9 per cent in real terms. The comparison quarter, April to June 2025, is shown at 6.9 per cent growth in the new series.

The Reserve Bank’s Monetary Policy Committee, in its resolution of 5 August, had set the first-quarter projection at 7.0 per cent and the full-year figure at 6.7 per cent. CNBC set the 7.8 per cent against a Reuters poll figure of 7.1 per cent, and 5paisa reported that the poll covered 58 economists. Rajni Thakur of L&T Finance called the result a “positive surprise”, WebIndia123 reported, because it arrived while the West Asia conflict was at its height. Our piece on India’s GDP rank and the numbers behind it sets the same quarter beside the IMF tables.

Services grew fastest, led by finance and IT

The tertiary (services) sector grew 10.0 per cent at constant prices. Within it, financial services, real estate, ownership of dwellings, IT and professional services grew 12.1 per cent, from ₹17.99 lakh crore to ₹20.17 lakh crore. Trade, hotels, transport, communication and broadcasting-related services grew 8.5 per cent, and public administration, defence and other services 7.5 per cent.

Indicators in the note’s annexure include railway passenger kilometres up 8.3 per cent and domestic air passenger and cargo traffic up 2.9 per cent. International air traffic fell 19.5 per cent in the same table. ICRA’s chief economist Aditi Nayar noted that services growth has now stayed in double digits for a third quarter in a row, according to the WebIndia123 report.

Factories, power and construction

The secondary sector grew 8.6 per cent. Manufacturing rose 9.2 per cent, from ₹9.38 lakh crore to ₹10.24 lakh crore, up from 8.3 per cent a year earlier. Electricity, gas and water supply rose 8.9 per cent, and construction 7.7 per cent.

The indicators back the picture. Industrial production of capital goods (machinery and equipment used to make other things) rose 15.2 per cent, electrical equipment 27.0 per cent, computers, electronics and optical products 12.4 per cent and other transport equipment 19.5 per cent. Electricity production rose 9.3 per cent after a 1.5 per cent fall a year before. Cement production rose 8.9 per cent and finished steel consumption 8.3 per cent. Sales of commercial vehicles rose 18.3 per cent and three-wheelers 29.7 per cent.

Investment grew at about twice last year’s pace

Gross fixed capital formation reached ₹27.96 lakh crore at constant prices, up from ₹24.97 lakh crore, a rise of 11.9 per cent. At current prices it grew 20.4 per cent, and its share of nominal GDP rose from 31.4 per cent to 34.3 per cent, the note’s tables show. Imports of machinery and equipment rose 51.5 per cent in the note’s indicator table.

The Reserve Bank’s October resolution lists “strong private consumption and fixed investment” among the reasons for the 7.8 per cent. In a speech published on 28 October, Deputy Governor Poonam Gupta also put the 11.9 per cent figure for fixed investment next to private consumption as the main drivers. Rajeev Sharan of Brickwork Ratings called it a revival in investment, and India Ratings’ Devendra Pant said capital spending by the Centre, states and central public sector companies together grew 16.9 per cent in the quarter, the WebIndia123 report says.

Consumption, exports and imports

Private final consumption expenditure, the spending of households, grew 7.1 per cent at constant prices, against 6.8 per cent a year earlier. It was 55.6 per cent of nominal GDP, and household vehicle registrations rose 15.9 per cent in the note’s indicator table. Government final consumption grew 4.3 per cent, working from the note’s constant-price levels.

Exports of goods and services were ₹19.14 lakh crore at constant prices, against ₹17.08 lakh crore, a rise of about 12 per cent on the same arithmetic. In rupee terms at current prices the note shows them up 25.8 per cent. Imports at constant prices were ₹19.51 lakh crore against ₹19.72 lakh crore, a small fall. The Reserve Bank’s August and October resolutions both say merchandise exports rebounded and services exports stayed strong. Our piece on September’s goods export figures covers the trade side month by month.

Farms, mines and the price adjustment

Agriculture, livestock, forestry and fishing grew 3.6 per cent, and the primary sector as a whole 2.9 per cent because mining and quarrying fell 2.4 per cent. Foodgrain output was up 4.8 per cent in the note’s indicator table, with rice up 6.2 per cent and wheat up 0.5 per cent. Mining output is the weaker side of the primary sector, and the table also shows fuel minerals down 4.5 per cent.

The gap between 10.3 per cent nominal and 7.8 per cent real growth implies a price adjustment of about 2.3 per cent for the economy as a whole, a figure worked out from the note’s levels. The Geostrata, which examined the release, observed that the adjustment is below consumer inflation and that the assumptions behind it deserve scrutiny. CNBC reported consumer inflation of 4.45 per cent for July. The note itself explains one source of the gap. The new series, built on 2022-23 prices and introduced on 27 February 2026, adjusts manufacturing output and inputs separately, and the note says the manufacturing price component can fall when input prices such as crude oil rise faster than output prices. The tables show manufacturing at 9.2 per cent real growth and 7.7 per cent nominal.

The 31 August release also updated every quarter back to April to June 2022. The January to March 2026 quarter was given as 7.8 per cent in the 5 June note. Two outlets, 5paisa and PSU Watch, report that it now stands at 8.6 per cent, while CNBC still writes 7.8 per cent, and the August note’s statements do not list that quarter. Full-year growth for 2025-26 was 7.7 per cent in the June note.

How the forecasts have moved since

The Reserve Bank’s Monetary Policy Committee met again from 5 to 7 October and raised its projection for 2026-27 to 7.1 per cent, from 6.7 per cent in August. Its resolution gives 7.2 per cent for July to September, 6.9 per cent for October to December and 6.8 per cent for January to March. Deputy Governor Gupta said on 28 October that the IMF’s October World Economic Outlook projects 7.0 per cent for the year.

Private forecasters differ. CareEdge Ratings raised its 2026-27 forecast to 7.3 per cent from 7.0 per cent, and India Ratings said growth is likely to cross 7.0 per cent, up from 6.8 per cent. Brickwork Ratings kept about 6.7 per cent and expects a harder comparison base in the second half. CareEdge’s Rajani Sinha cited geopolitical and trade-policy risks, El Niño and elevated food inflation as reasons to expect slower growth. The Reserve Bank’s October resolution names a deficient south-west monsoon, the West Asia conflict and volatile crude prices as the main risks, and judges the risks to growth “evenly balanced”. For how the weather system works, see our explainer on the monsoon.

The Reserve Bank and the government divide the work of setting interest rates and managing the rupee, as our explainer on the Reserve Bank sets out. MoSPI’s note gives 30 November 2026 as the release date for the July to September estimate.