India’s GDP Grows 7.8% in Q1 FY27 Amid Manufacturing and Investment Growth

India’s gross domestic product (GDP) growth accelerated to 7.8 per cent in the first quarter of FY27, totaling ₹81.36 lakh crore. This compares to a revised 6.9 per cent in the same period of the previous fiscal year, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).

The growth comes despite external challenges, including disruptions in West Asia, elevated energy prices, and ongoing global trade uncertainties. The figures outperformed various estimates, including the Reserve Bank of India's projection of 7 per cent, though it was lower than the revised Q4 GDP growth rate of 8.6 per cent.

Performance during the quarter was primarily driven by a 9.2 per cent growth in manufacturing and an 11.9 per cent surge in investment demand, measured by Gross Fixed Capital Formation. Additional support came from a 3.6 per cent expansion in agriculture and allied sectors, an 8.9 per cent rebound in electricity and utility services, and a 7.7 per cent rise in the construction sector. These gains helped offset a 2.4 per cent contraction observed in the mining sector.

Finance Minister Nirmala Sitharaman attributed the strong economic performance to the hard work of the people of India and ongoing government reforms, alongside agile macroeconomic management.

Real Gross Value Added (GVA), which serves as a supply-side indicator of production and sectoral performance, expanded by 8.2 per cent to reach ₹73.82 lakh crore. Meanwhile, nominal GDP expanded by 10.3 per cent in Q1 FY27 to hit ₹88.27 lakh crore.

Alongside the quarterly data, the National Accounts Statistics (NAS) publication released updated annual revised estimates for FY 2022-23 through FY 2024-25. These updates incorporate a new series of the Output Producer Price Index (PPI) and the Banking Services Price Index (BkSPI) with a base year of 2022-23. For manufacturing, the updated series utilizes a double-deflation approach, separately deflating output and intermediate consumption using relevant producer price indices to provide a more accurate measure of real manufacturing value added.

MoSPI noted that the current estimates remain subject to future revisions as improved data coverage and source agency updates become available. The next set of quarterly GDP estimates covering July-September 2026 is scheduled for release on November 30, 2026.

"The 7.8% GDP growth in the first quarter of FY27 reflects a resilient macroeconomic environment, anchored by strong manufacturing output and robust investment demand. For founders and business leaders operating in the Indian startup ecosystem, this sustained economic momentum—despite external pressures like elevated energy prices and global trade uncertainties—signals stable domestic demand and healthy capital formation. Tracking these sectoral shifts, particularly in manufacturing and infrastructure-linked segments, is crucial for long-term strategic planning and capital deployment." — Dr. Shishir Gupta, Founder & CEO, StartupLanes