India’s real gross domestic product (GDP) grew 7.8% year-on-year (y-o-y) in the first quarter (Q1) of FY26-27, signalling continued expansion despite global economic headwinds, according to the latest estimates released by the Union ministry of statistics and programme implementation (MoSPI).
Real GDP at constant FY22-23 prices is estimated at ₹81.36 lakh crore in Q1FY26-27, up from ₹75.46 lakh crore in the corresponding quarter of FY25-26.
Nominal GDP, measured at current prices, increased 10.3% during the quarter to ₹88.27 lakh crore, compared with ₹80 lakh crore a year earlier.
The latest quarterly estimates were released by MoSPI as part of the new GDP series with FY22-23 as the base year.
The government said the figures showed that the Indian economy had sustained its growth momentum despite global headwinds.
Real GVA Grows 8.2%
Gross value added (GVA), which measures the value generated across economic sectors, also recorded strong growth during the quarter.
Real GVA at constant prices rose 8.2% in Q1FY26-27 to ₹73.82 lakh crore, compared with ₹68.21 lakh crore in Q1FY25-26. Nominal GVA increased 11.5% to ₹80.53 lakh crore from ₹72.24 lakh crore a year earlier.
The GVA data indicate that the expansion was supported by activity across broad sectors of the economy, including manufacturing, construction, services and other economic activities.
Manufacturing and Investment Indicators Show Strength
Several high-frequency indicators used in compiling GDP estimates showed significant improvement in Q1.
The index of industrial production (IIP) for capital goods grew 15.2%, compared with 8.8% in Q1FY25-26. Production of electrical equipment rose 27%, against 9.7% a year earlier, while manufacture of other transport equipment increased 19.5%, compared with 3.8%.
Manufacture of computer, electronic and optical products grew 12.4%, up from 8.8% in the year-ago quarter. Machinery and equipment manufacturing also accelerated to 9.1% from 6.6%.
Infrastructure-related indicators remained positive. Cement production grew 8.9%, compared with 7.3% in Q1FY25-26, while finished steel consumption increased 8.3%, against 8% a year earlier.
The IIP for infrastructure and construction goods grew 7.2%, compared with 6.1% in the corresponding quarter of the previous financial year.
Electricity generation also registered a sharp turnaround, with the IIP for electricity rising 9.3%, compared with a contraction of 1.5% in Q1FY25-26.
However, mining and quarrying contracted by 1.2%, compared with the growth of 3.5% in the year-ago quarter. The fuel minerals index declined 4.5%, while natural gas consumption fell 2.6%.
Vehicle Sales Point to Stronger Demand
Domestic vehicle activity also strengthened during the quarter. Sales of commercial vehicles increased 18.3%, compared with a 0.3% contraction in Q1FY25-26. Sales of three-wheelers surged 29.7%, against growth of just 0.1% a year earlier.
Passenger vehicle registrations rose 15.9%, compared with 8.7% in Q1FY25-26. Registrations of goods transport vehicles increased 20.1%, while passenger transport vehicle registrations grew 13.9%.
These indicators suggest stronger activity in both household and commercial segments.
Exports and Imports Rise Sharply
External trade recorded substantial increases during the quarter. Exports of goods and services grew 25.8%, compared with 5.7% in Q1FY25-26, while imports rose 30.5%, compared with 5.9% a year earlier.
Exports of transport goods jumped 52.2%, compared with a 7.2% contraction in Q1FY25-26. Exports of machinery and equipment rose 31.9%.
Imports of machinery and equipment increased 51.5%, while imports of transport goods rose 13.5%.
The strong movement in both exports and imports was among the indicators incorporated into the expenditure-side GDP estimates.
Railway Passenger Traffic Improves
Transport activity also provided mixed but broadly supportive signals. Railway passenger kilometres grew 8.3%, compared with 3% in Q1FY25-26, while railway net tonne kilometres declined 0.7%, compared with growth of 0.5% a year earlier.
Cargo handled at major ports increased 6.2%, compared with 5.4% in Q1FY25-26. Cargo handled at minor ports, however, declined 0.6%.
Domestic scheduled air passenger traffic and cargo activity grew 2.9%, slower than the 6.7% growth recorded in the year-ago quarter. International scheduled air passenger traffic and cargo activity contracted sharply by 19.5%, compared with 8.4% growth in Q1FY25-26.
New GDP Series Incorporates Updated Data
The Q1 estimates are part of the new series of annual and quarterly GDP estimates introduced by the MoSPI in February 2026, with FY22-23 as the base year.
The ministry said the latest estimates incorporate the new series of the output producer price index (PPI), the IIP with FY22-23 as the base year and updated administrative data from various sources.
The national accounts statistics publication, released alongside the estimates, also includes revised annual estimates for FY22-23, FY23-24, and FY24-25.
Quarterly GDP estimates from Q1FY22-23 through Q4FY25-26, along with provisional GDP estimates for FY25-26, have also been updated.
Double Deflation Introduced for Manufacturing
A significant methodological change in the new series is the adoption of a double-deflation approach to estimate manufacturing GVA.
Under this method, output and intermediate consumption are deflated separately using relevant Producer Price Indices. Real manufacturing GVA is then derived as the difference between real output and real intermediate consumption.
MoSPI said this provides a more robust measure of real value added by capturing changes in the prices of both output and inputs.
The ministry also cautioned that, under double deflation, the implicit price deflator for manufacturing GVA can decline or even fall into negative territory, despite increases in both output and input prices.
This can happen when input costs, such as crude petroleum, natural gas and raw materials, rise faster than output prices, putting pressure on the price component of value added.
Estimates Subject to Revision
MoSPI said the GDP estimates are based on the benchmark-indicator methodology, under which estimates for the previous financial year are extrapolated using indicators reflecting the performance of different economic and institutional sectors.
The compilation uses a wide range of indicators, including crop production, IIP, GST data, steel consumption, vehicle sales, air and rail traffic, port cargo, banking and insurance data, government accounts, CPI and the new output PPI.
The ministry cautioned that the estimates are subject to revision as improved data coverage and revisions to input data by source agencies become available.
The comprehensive publication Sources and Methods, covering the methodology and data sources, is scheduled for release by September 2026.
The next quarterly GDP estimates, covering Q2FY26-27 (July-September 2026), are scheduled for release on 30 November 2026.
If per capita grows that mean real growth