India’s Economy Grows Stronger-Than-Expected 7.8% in March Quarter
India’s economy expanded by a stronger-than-expected 7.8% year-on-year in the January–March quarter of fiscal year 2025-26, according to government data released on Friday. The growth rate surpassed economists’ forecast of 7.2%, supported by robust private investment, higher agricultural output, and strong construction activity. The National Statistics Office (NSO) also revised its estimate for full-year GDP growth to 7.7%, slightly higher than its earlier projection of 7.6%, reinforcing India’s position as one of the world’s fastest-growing major economies.
Economists noted that resilient domestic demand helped offset the initial effects of the Middle East conflict, which emerged toward the end of the quarter. Analysts from DBS Bank and HDFC Bank said the geopolitical tensions had only a limited impact on economic momentum during the period, while Oxford Economics highlighted that stronger investment compensated for a slowdown in private consumption. Several experts observed that India’s growth cycle remained on a solid footing before recent global disruptions intensified.
Despite the upbeat figures, economists cautioned that growth is likely to moderate in fiscal year 2026-27 due to rising geopolitical risks, elevated energy prices, inflationary pressures, and concerns over weaker monsoon conditions linked to El Niño. Forecasts for the coming year range between 6% and 7%, with analysts warning that prolonged supply disruptions, higher fuel and food costs, and tighter financial conditions could weigh on consumer spending and investment activity. However, continued policy support, resilient consumption, and export growth are expected to provide some cushion against these headwinds.
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