ECONOMY
Consumption, exports and govt capex boost Q1 FY27 GDP to a robust 7.8%
- IBJ Bureau
- Aug 31, 2026
India’s Gross Domestic Product (GDP) quickened to 7.8 per cent in the first quarter (Q1) of FY27, up from revised 6.9 per cent in the same quarter last year.
Resilient consumption and exports, coupled with robust government capital expenditure (capex), defied supply chain disruptions and inflated commodity prices triggered by the US-Iran war, delivering promising growth numbers.
India’s April-June quarter growth was, however, slower than the revised growth of 8.6 per cent in the previous three months (January-March).
Gross Value Added (GVA), a measure of economic activity that excludes taxes and subsidies, grew at 8.2 per cent in real terms, up from 7.1 per cent in the corresponding period last year.
Meanwhile, nominal GVA growth stood at 11.5 per cent for Q1 in real terms.
Nominal GDP grew by 10.3 per cent in Q1 compared with 8.1 per cent a year earlier.
Key primary sectors witnessed moderation during the first quarter. Agricultural growth slowed to 3.6 per cent YoY in Q1 FY27 from 4.4 per cent a year earlier, while the mining sector registered a sharp drag, shrinking by 2.4 per cent compared to a stellar 12.4 per cent growth in the corresponding period last year.
On the industrial front, manufacturing kept up its solid run, growing by 9.2 per cent in Q1 compared to 8.3 per cent a year ago.
The electricity sector saw a dramatic turnaround, jumping to 8.9 per cent growth after shrinking by 1.8 per cent in the same period last year.
Construction also picked up a healthy steam, expanding by 7.7 per cent against 5.2 per cent last year, giving a solid boost to overall economic activity.
Last year’s Goods and Services Tax (GST) rate cut and Income Tax reduction likely continued to support household disposable income and demand, helping cushion the impact of rising inflation.
But economists expect the recent pickup in private investment to be temporary.
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