On a sprint: Q1 GDP growth at 7.8% marks strong start to FY 2025-26, with services sector powering ahead

The Indian economy has demonstrated strong growth in the first quarter of the financial year 2025-26 (Q1 FY 2025-26), as reported by the Ministry of Statistics and Programme Implementation (MoSPI). The country’s Real GDP has expanded by 7.8% in comparison to 6.5% in Q1 of FY 2024-25, reflecting the resilience and strength of various sectors.

Key Highlights

• Real GDP for Q1 FY 2025-26 stands at ₹47.89 lakh crore, marking a 7.8% growth from ₹44.42 lakh crore in the same quarter of the previous fiscal year.
• Nominal GDP has also shown significant growth, reaching ₹86.05 lakh crore, up 8.8% from ₹79.08 lakh crore in Q1 of FY 2024-25.
• The Real Gross Value Added (GVA) for Q1 FY 2025-26 is estimated at ₹44.64 lakh crore, with a 7.6% year-on-year growth.
• The nominal GVA has surged to ₹78.25 lakh crore, up by 8.8% compared to ₹71.95 lakh crore in Q1 of FY 2024-25.

The impressive performance has been largely driven by buoyant growth in the services sector, which saw a remarkable 9.3% growth in the quarter. This is a significant increase from the 6.8% growth recorded during the same period last year. The secondary sector, especially manufacturing and construction, has also shown robust growth, recording growth rates of 7.7% and 7.6%, respectively.

Sectoral Performance

• The agricultural sector, which has been crucial for India’s growth, saw a growth rate of 3.7% in Q1 FY 2025-26, an improvement over the 1.5% growth rate in the same quarter last year.
• Mining & Quarrying (-3.1%) and Electricity, Gas, and Water Supply (0.5%) experienced slower growth rates, signaling challenges in these sectors.
• The tertiary sector, primarily driven by trade, hotels, transport, and financial services, recorded an impressive 9.3% growth at constant prices.

The government’s final consumption expenditure has also rebounded strongly, posting a growth of 9.7% in nominal terms, as compared to 4.0% in Q1 of FY 2024-25. Private consumption, however, showed a slight deceleration, with real private final consumption expenditure (PFCE) growing at 7.0%, compared to 8.3% in the same period last year.

Additionally, the country’s investment activities are on an upward trajectory, with gross fixed capital formation (GFCF) expanding by 7.8% at constant prices, higher than the 6.7% growth registered in Q1 of FY 2024-25.

Future Outlook
With the Indian economy continuing to display solid growth across various sectors, experts remain optimistic about the economic prospects for the remainder of FY 2025-26. The data, based on indicators from key sectors, will be revised as more comprehensive data becomes available in the coming months.

The next quarterly GDP estimates for Q2 of FY 2025-26 will be released on November 28, 2025.