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3h ago

India Posts 7.8% Q1 Growth, Topping Forecasts as U.S. Tariff Risks Loom

A soft deflator likely boosted the reading, with new U.S. tariffs now threatening export‑led sectors.

Transport trucks carry cargo containers to be loaded on the Hapag-Lloyd container ship Frankfurt Express at the DP World Centerm terminal at port, in Vancouver, on Sunday, August 3, 2025. THE CANADIAN PRESS/Darryl Dyck
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Overview

  • Official NSO data show real GDP rose 7.8% in April–June, a five‑quarter high, with GVA up 7.6% and nominal GDP at 8.8%.
  • Services led with 9.3% growth and manufacturing rose 7.7%, while mining contracted 3.1% and utilities growth slowed to 0.5%.
  • On the demand side, private consumption grew 7.0%, government consumption rebounded 7.4%, and investment (GFCF) increased 7.8%, supported by a 52% jump in central capex.
  • Economists flagged technical supports to the print, citing an unusually low deflator and front‑loaded spending and exports to the U.S., which may reverse in coming quarters.
  • Washington has doubled tariffs on selected Indian goods to as high as 50%, prompting warnings on exports and growth even as the RBI sticks to a 6.5% FY26 forecast and the CEA guides to a 6.3%–6.8% range.