India rides out West Asia storm as GDP grows 7.8% in April-June quarter

India's economy expanded a stronger-than-anticipated 7.8% in the April-June quarter, defying concerns that geopolitical tensions in the West Asia region could dampen growth, according to official data released on Monday. This marks a notable recovery from the 6.9% growth observed in the comparable period last year, and surpasses the 7.3% expansion anticipated in a recent ET Poll.

Prime Minister Narendra Modi attributed India's robust performance to the collective strength of its people and the effectiveness of government policies, stating that achieving such growth amidst challenges was a "Herculean feat." The growth was driven by resilient domestic consumption, continued government support through spending and investment, and robust export performance.

Manufacturing emerged as a key growth driver, expanding by 9.2% in the quarter, while services grew by 10%, with the financial, real estate, ownership of dwellings, IT and professional services sectors showing the fastest growth at 12.1%. Despite the adverse impact of the West Asia conflict on certain sectors and the uneven monsoon, India's growth remained resilient, with economists predicting a continued expansion of around 7% for the fiscal year 2027.