India Records 7.8% GDP Growth in Q1 of FY27, Industry Leaders Call for Sustained Investment

Industry leaders and economists have welcomed India's latest gross domestic product (GDP) figures, reporting a 7.8 per cent expansion in the first quarter (Q1) of the fiscal year (FY27). According to market participants, the performance reflects resilient domestic activity and healthier underlying economic fundamentals, outperforming earlier market estimates.

Saurabh Sanyal, Secretary General of the Associated Chambers of Commerce and Industry of India, stated that the growth trajectory aligned with projections made earlier in the year. In April 2026, the chamber had anticipated that Q1 growth would exceed 7 per cent. Sanyal attributed the current pace to wide-ranging government reforms and proactive policies enacted during recent parliamentary sessions and over the past year, which have encouraged private sector participation and domestic investments.

Manoranjan Sharma, Chief Economist at Infomerics Ratings, confirmed that real GDP growth rose from 6.9 per cent in the previous year to 7.8 per cent. Sharma noted that the expansion points to genuine improvements in economic activity rather than price effects alone. However, he cautioned that sustaining an expansion close to 8 per cent over the medium term will necessitate stronger private investment, productivity growth, manufacturing momentum, exports, and employment generation.

Addressing structural requirements, Surjit Bhalla, former part-time member of the Economic Advisory Council to the Prime Minister, indicated that raising the investment-to-GDP ratio is critical to unlocking additional growth potential. Bhalla noted that India's current investment rate stands at approximately 28 to 30 per cent of GDP, which historically supports a long-term growth rate of 6.5 per cent. Achieving an accelerated rate requires raising the investment rate to roughly 34 to 35 per cent. He added that given current unfavorable and stagnant global conditions, stepping up domestic investment rates becomes even more crucial.

Reflecting on the broader economic outlook, Rajani Sinha, Chief Economist at CareEdge, noted that the stronger-than-expected opening quarter has prompted an upward revision for the full-year forecast. Although analysts anticipate some moderation in GDP growth during the second and third quarters, CareEdge has upgraded its full-year growth projection from around 7 per cent to approximately 7.3 per cent.

"The robust 7.8 per cent GDP growth in the first quarter of FY27 demonstrates the underlying strength of India's domestic economic activity and the positive impact of recent policy reforms. However, as noted by economists, bridging the gap to higher long-term growth will depend heavily on scaling up our investment-to-GDP ratio from the current 28-30 per cent range to around 34-35 per cent. For the startup and private business ecosystem, this environment underscores the importance of strategic capital allocation and sustained productivity as we navigate broader global uncertainties." — Dr. Shishir Gupta, Founder & CEO, StartupLanes