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India's economy grows faster-than-expected at 7.8% in the June quarter

Robust growth driven by manufacturing, construction, and services sectors, with government spending up 9.7% and nominal GDP rising 8.8%, despite increased US import tariffs.

  • The NSO said in its Q1 release on Friday that India’s economy grew 7.8% in Q1 of FY 2025-26, with real GDP at Rs 47.89 lakh crore and nominal GDP at Rs 86.05 lakh crore.
  • Domestic demand strengthened as private consumption rose 7.0% and investment expanded 7.8%, while government consumption rebounded 9.7% in nominal terms.
  • Agriculture rose 3.7% in the quarter, public administration climbed 9.8% aided by 52% Centre capex growth, and exports increased 5.9% in the June quarter.
  • U.S. tariffs — initially 25% and later up to 50% — could shave 30 basis points from India's full-year growth, Barclays economist Aastha Gudwani estimated, while analysts warn of global trade risks.
  • The World Bank and IMF project FY26 growth at 6.3% and 6.4%, while economists expect GST rationalisation, RBI easing, and a favourable monsoon to support consumption.
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Bloomberg broke the news in United States on Friday, August 29, 2025.
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