US President Donald Trump may have dismissed India’s economy as ‘dead’ but the latest GDP grow data shows otherwise. The country’s Gross Domestic Product (GDP) grew 7.8% in the June quarter, the highest in five quarters. 

The GDP growth, coming before the US imposed stiff tariffs of 50% on Indian goods and beating forecasts, was led by the services sector.

India continued to be the fastest-growing economy, even as China’s GDP growth in the April-June quarter stood lower at 5.2%. The latest GDP print is above the Reserve Bank of India’s (RBI) projection of 6.5% for the fiscal first quarter. 

India’s GDP maintained its momentum from 7.4% recorded in the previous three months ended March.  In the year-ago period, the GDP growth rate stood at 6.5%.

The previous highest GDP growth was 8.4% in January-March of 2024, as per government data.

India’s growth could slow down as US tariffs begin to bite and threaten exports and jobs. Earlier this month, the RBI retained its GDP growth forecast for Q2 at 6.7% and for the full-fiscal at 6.5%.

In the April-June period, India’s services sector grew 9.3% from 6.8% a year ago. Manufacturing expanded at 7.7% and  construction at 7.6%. Agriculture grew 3.7% compared to 1.5% a year ago.

Here is what economists said:

Aditi Nayar, Chief Economist at ICRA

"After the unexpectedly strong first quarter of FY2026, a lower year-over-year momentum of government capex and the looming hit to exports from the US tariff and penalties would dampen growth prints in the coming quarters, notwithstanding the balm offered by GST rationalisation.

"Amidst continuing uncertainty, we maintain our baseline GDP growth forecast at 6.0% for FY2026.

"The sharper-than-expected GDP growth print, which represents an acceleration over the previous quarter, has doused any expectations that the tariff-related turmoil could prompt monetary easing in the October 2025 policy review."

Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank

"The sharply higher-than-expected first-quarter GDP data provides a reasonable upside to our earlier full-year estimate of 6.2%.

"However, we remain fairly cautious on the way ahead amid expected slowdown in exports from higher tariffs along with deferring in production ahead of GST rate cuts.

"We expect some policy interventions to help offset the adverse impact of the tariff impact on exporters."

Radhika Rao, Senior Economist at DBS Bank

"A sharp upside surprise in growth numbers belied consensus expectations for a slowdown. This was a product of strong service sector output benefiting from low deflators, coupled with firm farm output, and a jump in revenue as well as capital government spending.

"A bigger watch factor is the sub-9% nominal GDP growth, which has second derivative impact on tax collections and corporate profit performance.

"Markets will switch focus to the catalysts for rest of the year, which faces an interplay of tariff-related impact, passage of front-loading of exports, boost from GST rationalisation and government spending trend with an eye on revenues."