India's economy grew at 7.8% in the April-June quarter, surpassing forecasts and demonstrating resilience amid global headwinds and an ongoing US-Iran war.

Though gross domestic product (GDP) growth slowed in the first quarter of FY26 ended June from 8.6% in the previous quarter, it remained well above expectations. The Reserve Bank of India (RBI) had forecast just 7% growth for the fiscal first-quarter that began in April.

Real Gross Domestic Product, or GDP at constant prices, in the first quarter of FY27 is estimated at Rs 81.36 lakh crore, against Rs 75.46 lakh crore in the corresponding quarter of 2025-26, showing a growth rate of 7.8%, Ministry of Statistics and Programme Implementation (MoSPI) said.

Nominal GDP, or GDP at current prices, in the April-June quarter of the current fiscal year is estimated at Rs 88.27 lakh crore, against Rs 80 lakh crore in the first quarter of 2025-26, showing a growth rate of 10.3%.

Manufacturing sector grew 9.2% from 8.3% in the same period last year. Led by bank credit, the financial services sector grew 12.1% in the June quarter versus 8.8%.

"The ‌key risks ⁠are now less about a softer domestic story and more about the persistence of high oil prices, rupee weakness and tighter global financial conditions. Scope for full-year growth to be north of 7% is high," said Radhika Rao, senior economist at DBS Bank.