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9m ago

India’s Economy Surges 7.8% in Q1, Beating Forecasts Before U.S. Tariff Drag

Analysts attribute the upside to one‑off front‑loading, warning of a near‑term slowdown as U.S. tariff hikes take effect.

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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India's GDP

Overview

  • Official NSO data show real GDP up 7.8% in April–June with real GVA at 7.6% and nominal GDP at 8.8%, topping median forecasts near 6.7%.
  • Services led growth at about 9.3% as manufacturing rose 7.7% and construction 7.6%, offset by a 3.1% mining contraction and weak utilities, while agriculture grew 3.7%.
  • On the expenditure side, household consumption increased 7.0%, investment rose 7.8% and government consumption rebounded, supported by a roughly 52% jump in central capex.
  • Economists point to front‑loaded public spending and accelerated shipments before higher U.S. duties as key supports, with exports of goods and services reported up about 5.9%.
  • With U.S. tariffs now doubled to as high as 50% on many Indian goods, forecasters expect growth to cool in coming quarters, as the CEA casts the shock as an opening for domestic reforms.