India's GDP grows 7.8% in Q1, beats expectations despite Iran war

India's economy grew 7.8 per cent in the April-June quarter, beating expectations and the Reserve Bank of India's forecast despite concerns that the Iran war and resulting global economic uncertainty could weigh on growth.

Gross domestic product (GDP) growth in the first quarter of the 2026-27 fiscal year slowed from 8.6 per cent in the previous quarter but remained significantly higher than the 7 per cent projected by the RBI.

The latest figures suggest that domestic economic activity has remained resilient despite heightened geopolitical risks, including the Iran conflict, which has disrupted energy markets and raised concerns over higher oil prices, inflation and weaker global demand.

The RBI has projected India's economy to grow 6.7 per cent in the full 2026-27 fiscal year. The Q1 growth rate compares with 6.9 per cent in the corresponding quarter of 2025-26, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.

Real GDP, or GDP at constant prices, is estimated at ₹81.36 lakh crore in the first quarter of FY27, compared with ₹75.46 lakh crore in the same period last fiscal, representing a growth of 7.8 per cent.
"Indian economy has sustained growth momentum despite global headwinds," MoSPI said.

The stronger-than-expected performance is likely to offer some relief to policymakers as they seek to sustain growth while managing risks from geopolitical tensions and volatile commodity markets.

Prime Minister Narendra Modi welcomed the figures, calling the 7.8 per cent Q1 growth an "exemplary" performance and a "herculean feat".

"The collective strength of our people ensured India delivered such growth despite oil price shocks and supply chain issues in the midst of global uncertainties," Modi said in a post on X. "Doomsayers were doomed and India bloomed...yet again!" he added.

Finance Minister Nirmala Sitharaman also attributed the performance to the country's economic reforms and domestic workforce. "The credit for this strong performance goes to the people of India and their hard work. Reforms undertaken by the NDA Government, together with an agile management of the economy, are bearing results," she said in a post on X.

Nominal GDP, or GDP at current prices, was estimated at ₹88.27 lakh crore in the April-June quarter, compared with ₹80 lakh crore in the first quarter of 2025-26, marking a growth of 10.3 per cent.