India’s economy grew 7.8% in April–June 2026, well above the 7.1% economists expected and the RBI’s 7% projection. Services carried the quarter. Farms grew just 2.9%.
Between April and June, oil spent weeks above $100, the rupee hit a record low and restaurants faced a gas shortage. India’s GDP grew 7.8% anyway, according to data released on August 31, well above the 7.1% median of a Reuters poll of economists and the RBI’s own 7% projection. The breakdown explains how an economy grew faster during an oil shock than it did a year earlier without one.
Services carried it
Measured by gross value added, the economy’s output grew 8.2%. The services sector grew about 10%, led by finance, trade, transport and public administration. Industry grew 8.6%, helped by construction and manufacturing. Agriculture grew just 2.9%, an early sign of the weak monsoon. Services make up more than half of India’s economy and depend far less on oil than heavy industry does, which helped cushion the shock.
The nominal number came back
Last year, India had the strange experience of strong real growth with weak nominal growth, because inflation was close to zero. This quarter, nominal GDP grew 10.3%. That is good news for tax collections and company revenues, which are earned in rupees, and less good news for households, since part of that nominal growth is simply higher prices.
Growth figures arrive two months late and get revised for two years. Read them as a direction, not a verdict.
A note on comparisons
This is one of the first quarterly estimates under India’s new GDP series, with a 2022-23 base year. The new series revised growth for the same quarter last year to 6.9%, lower than first reported under the old method, which makes this year’s jump look larger. MoSPI also cautions that the estimate will be revised as better data arrives. The honest reading is that India grew strongly through the worst of the oil shock, mainly because of services, and that the weak monsoon will weigh on the quarters that follow.
Sources: MoSPI quarterly GDP estimates, August 31, 2026.
- Real GDP grew 7.8% in April–June 2026, against a Reuters poll estimate of 7.1%.
- Services grew about 10% and industry 8.6%. Agriculture grew 2.9%.
- Nominal GDP grew 10.3%, much faster than last year as inflation returned.
- Under the new GDP series, the same quarter last year was revised to 6.9% growth.
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