India Shows a Resilient Growth in Q1 of 2025-26
On 29th August,2025, the Ministry of Statistics and Programme Implementation (MoSPI) released a press note on the Quarterly Estimates of Gross Domestic Product (GDP) for the April-June Quarter (Q1) of Financial Year (FY) 2025-26, along with its Expenditure components both at Constant (2011-12) and Current Prices.
This article we will see the Sectoral & Overall growth rate, Sectoral analysis, and end with a conclusion. Let’s get started.
Growth Rate of Q1 of 2025-25
In the first quarter of FY2025–26, India’s economy showed impressive growth, achieving a solid 7.8% increase in real GDP, which was considerably better than what the market anticipated and surpassed the 6.5% growth from the first quarter of the previous year.
India’s rapid economic growth, despite obstacles such as high tariffs and global instability, confirms its position as the world’s fastest-growing major economy.
Before going further into the data, let us take a look at the major highlights of the Q1 GDP 2025-26 data.
India Shows a Resilient Growth in Q1 of 2025-26 – Major Highlights
Gross Domestic Product (GDP) Growth
Real GDP Growth:
The Real GDP growth is estimated at 7.8% Year-on-Year (YoY), at ₹47.89 lakh crore as against ₹44.42 lakh crore in Q1 of FY 2024-25.
Nominal GDP Growth:
The Nominal GDP is estimated at 8.8% YoY, at ₹86.05 lakh crore as against ₹79.08 lakh crore in Q1 of FY 2024-25.
Gross Value Added (GVA) Growth
Real Gross Value Added (GVA):
The Real GVA is forecasted to be ₹44.64 lakh crore during the first quarter (Q1) of fiscal year 2025-26, indicating a 7.6% growth from the ₹41.47 lakh crore of the Q1 of fiscal year 2024-25.
Nominal Gross Value Added (GVA):
It’s estimated that the Nominal GVA for Q1 of FY2025-26 will be ₹78.25 lakh crore, which is an 8.8% growth from the ₹71.95 lakh crore recorded in Q1 of FY2024-25.
Strong Sectoral Performance:
|
Sectors |
Q1 2025-26 |
|
Agriculture |
3.7% |
|
Manufacturing |
7.7% |
|
Construction |
7.6% |
|
Services (Tertiary) |
9.3% |
Sectoral Analysis
- Agriculture and Allied Activities
Agriculture grew by 3.7%, showing a remarkable increase from 1.5% Q1 of last year, supported by favourable monsoon conditions and strong Rabi and kharif crops sowing.
- Mining and Utilities
Mining contracted by 3.1%, largely due to flood-related disruptions. Utility services grew marginally at 0.5%, indicating subdued demand or supply constraints.
- Secondary Sector
Manufacturing and Construction both posted strong growth rates of 7.7% and 7.6%, respectively. These gains reflect increased industrial activity and infrastructure investments.
- Tertiary Sector (Services)
The Services Sector led the charge with a 9.3% growth, driven by robust expansion in financial services, real estate, and public administration. This marks a sharp rise from 6.8% in Q1 FY 2024–25.
Expenditure-Side Dynamics
Private Final Consumption Expenditure (PFCE):
PFCE grew by 7.0%, slightly lower than last year’s 8.3%, signifying cautious consumer sentiment
Government Final Consumption Expenditure (GFCE):
GFCE increased by 9.7%, reflecting front-loaded fiscal spending
Gross Fixed Capital Formation (GFCF):
GFCF rose by 7.8%, indicating healthy investment activity.
Sector-Wise GDP Growth Breakdown (Q1 FY 2025–26)
|
Sector |
Growth Rate (YoY) |
Key Insights |
|
Agriculture & Allied Activities |
3.7% |
Strong rabi output and a favourable monsoon boosted farm income |
|
Manufacturing |
7.7% |
Driven by auto, electronics, and FMCG production |
|
Construction |
7.6% |
Infrastructure push and housing demand sustained momentum |
|
Electricity, Gas, Water Supply |
0.5% |
Sluggish due to lower industrial demand and grid constraints |
|
Mining & Quarrying |
–3.1% |
Disrupted by floods and regulatory bottlenecks |
|
Trade, Hotels, Transport, Communication |
9.1% |
Tourism rebound and e-commerce expansion led the way |
|
Financial, Real Estate & Professional Services |
9.4% |
Credit growth, fintech adoption, and real estate boom |
|
Public Administration, Defence & Other Services |
9.2% |
Higher government spending and welfare disbursements |
Conclusion/ My Perspective
In summary, these growth rates demonstrate resilience with some limitations. India is experiencing rapid expansion, but moving forward requires smart policy decisions, fair growth strategies, and strategic investments.
#Indiagrowth
