Archive · 31 Aug 2026
India’s Economy Shows Strong Resilience Despite External Pressures
India’s economy grew quickly in the June quarter, even though oil was expensive and there were problems around the world.
It grew 7.8% compared with the same period a year earlier.
Factories and service businesses both helped the economy expand.
India’s exports also increased despite tariff problems in the United States.
Businesses invested more, and families continued to spend money.
Tax relief and cuts to goods and services tax may have helped support spending.
However, expensive oil, bad weather, and weaker global growth could make things harder.
If inflation spreads, the Reserve Bank of India may have more freedom to raise interest rates.
Even with these risks, growth of 7% or more in FY27 is described as increasingly achievable unless there is another major external shock.
India’s economy expanded 7.8% year-on-year in the June quarter, slowing from 8.6% in the March quarter.
Gross value added rose 8.2%, led by manufacturing growth of 9.2% and resilient services activity.
Exports increased 12% despite tariff difficulties in the United States and disruptions from the war in West Asia.
Gross fixed capital formation surged nearly 12%, while private consumption grew 7.1%.
Risks include elevated oil prices, El Niño conditions, weaker global growth, and inflation that could limit future expansion.
- Who
- The Indian economy, supported by manufacturers, service businesses, households, exporters, and public spending.
- What
- India recorded 7.8% year-on-year economic growth in the June quarter, with investment, consumption, exports, manufacturing, and services all contributing.
- When
- The June quarter, described as the first quarter of the financial year; the articles do not specify the calendar year.
- Where
- India, amid global disruptions linked to the war in West Asia and tariff difficulties in the United States.
- Why
- Growth was supported by manufacturing and services, strong investment, resilient consumption, exports, credit growth, and continued public spending.
- Quarterly growth
- Real GDP expanded 7.8% year-on-year in the June quarter.
- Previous quarter
- Growth was 8.6% in the March quarter.
- Gross value added
- GVA grew 8.2%, including 9.2% growth in manufacturing.
- Exports
- Exports increased 12% during the quarter.
- Investment
- Gross fixed capital formation rose nearly 12%, its strongest showing in the new GDP series.
- Consumption
- Private final consumption expenditure grew 7.1%.
- Nominal GDP
- Nominal GDP increased 10.3%, below expectations of 12.5%-13%.
- Growth outlook
- Growth of 7% or more for FY27 is described as increasingly achievable, barring a fresh external shock.