India’s Economy Surges 7.8% in Q1 FY26, Beats Previous Year’s 6.5%

byPaytm Editorial TeamSeptember 1, 2025
Key Takeaways
  • India’s GDP growth accelerated to 7.8%, boosted by services and manufacturing.
  • The agriculture sector showed modest recovery, while mining contracted.
  • Government spending surged, strengthening demand.
  • Private consumption growth slowed slightly but remained strong.
  • GDP estimates may undergo revision as new data arrives.

Source: PIB Press Release

India’s economy recorded a strong start in the first quarter (April–June) of FY 2025-26, with Real GDP rising 7.8%, compared to 6.5% growth in the same period last year (Q1 FY 2024-25). This robust performance was largely driven by the services sector, while agriculture and manufacturing also contributed positively.

The National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) released the latest Quarterly Estimates of GDP and Gross Value Added (GVA), highlighting both sectoral performance and expenditure trends.

Key Highlights (April–June 2025 vs April–June 2024)

  • Real GDP: Grew 7.8% in April–June 2025, compared to 6.5% in April–June 2024.
  • Nominal GDP: Rose 8.8% in April–June 2025, against the same quarter in 2024.
  • Agriculture & Allied Activities: Expanded by 3.7% in April–June 2025, compared to 1.5% in April–June 2024.
  • Manufacturing: Increased by 7.7% in April–June 2025.
  • Construction: Grew by 7.6% in April–June 2025.
  • Mining & Quarrying: Declined -3.1% in April–June 2025, compared to growth last year.
  • Electricity, Gas, Water Supply & Utilities: Marginal growth of 0.5% in April–June 2025.
  • Services (Tertiary Sector): Registered 9.3% growth in April–June 2025, stronger than 6.8% in April–June 2024.
  • Government Final Consumption Expenditure (GFCE): Jumped 9.7% in nominal terms in April–June 2025, higher than 4.0% in April–June 2024.
  • Private Final Consumption Expenditure (PFCE): Increased by 7.0% in April–June 2025, compared to 8.3% in April–June 2024.
  • Gross Fixed Capital Formation (GFCF): Rose 7.8% in April–June 2025, compared to 6.7% in April–June 2024.

Quarterly GDP and GVA Estimates

Methodology and Major Data Sources

  1. Compilation Approach
    • The Quarterly Estimates of GDP are prepared using the Benchmark-Indicator Method.
    • Estimates from the same quarter of the previous year (Q1 FY 2024-25) are extrapolated with updated sector-wise performance indicators.
    • Data inputs are collected from various Ministries, Departments, and Private Agencies.
  2. Sector-wise Indicators Used
    The following data sets were considered for different sectors:
    • Agriculture:
      • Crop production targets for Agriculture Year (AY) 2025-26.
      • Third Advance Estimates of food grains, oilseeds, and commercial crops for AY 2024-25.
      • Second Advance Estimates of horticulture crops for AY 2024-25.
      • Summer Season Estimates of major livestock products for FY 2025-26.
      • Fish production estimates for Q1 FY 2025-26.
    • Industry & Infrastructure:
      • Quarterly financial results of listed companies for Q1 FY 2025-26.
      • Production of coal, crude petroleum, natural gas, cement, and the consumption of steel.
      • Index of Industrial Production (IIP).
    • Transport & Trade:
      • Railway data: Net Tonne Kilometres and Passenger Kilometres.
      • Air traffic: passenger and cargo handled at airports.
      • Port traffic: cargo at major and minor sea ports.
      • Commercial vehicle sales.
    • Financial & Insurance Sector:
      • Bank deposits and credits.
      • Premium data of life and non-life insurance companies.
    • Government & GST Data:
      • Outward supply of goods and services from GSTN for Q1 FY 2025-26.
      • Accounts of Central and State Governments for Q1 FY 2025-26.
      • Goods and Services Tax (GST) collection for Q1 FY 2025-26.
  3. Taxes on Products
    • At Current Prices: Estimated using data from CGA (Controller General of Accounts) and CAG (Comptroller & Auditor General of India), covering both GST and non-GST revenue.
    • At Constant Prices: Calculated using volume extrapolation based on the growth of taxed goods and services.
  4. Subsidies
    • Central Government: Food, Urea, Petroleum, and Nutrient-based subsidies (up to Q1 FY 2025-26).
    • State Governments: Total subsidies expenditure (up to Q1 FY 2025-26).
  5. Government Final Consumption Expenditure (GFCE)
    • Estimated using data on Revenue Expenditure, Interest Payments, Subsidies, and other fiscal items from both the Centre and States

Revision Policy

The next GDP release (Q2, July–September FY 2025-26) is scheduled for 28 November 2025.

The NSO highlighted that improved data coverage and revisions from source agencies may lead to changes in future estimates. Users are advised to interpret current figures with caution.

FAQs

What is the GDP growth for April–June 2025 (Q1 FY 2025-26)?

Real GDP grew 7.8%, higher than 6.5% in the same quarter of last year.

Which sector grew the most in Q1 FY 2025-26?

The Services sector (Tertiary), with 9.3% growth.

How did agriculture perform in April–June 2025?

Agriculture & allied activities grew 3.7%, up from 1.5% in Q1 FY 2024-25.

Why did Mining & Quarrying decline?

It contracted by -3.1% due to reduced crude petroleum and natural gas output.

When will the next GDP estimates be released?

On November 28, 2025, covering Q2 (July–September 2025) of FY 2025-26.
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