India’s GDP grows 7.8% in Q4, full-year growth rises to 7.7%

PTI

New Delhi

India's economy expanded 7.8% in the January-March quarter, exceeding forecasts on strong domestic demand and government expenditure, before rising oil prices and supply-chain disruptions began clouding the outlook.

The GDP growth compared with 7% expansion a year back and 8% in the previous quarter. Full-year growth accelerated to 7.7% from 7.1% in FY25, supported by healthy consumption and robust investment activity. 

The January-March period accounted for just one month of disruptions caused by the war in Iran. The spike in oil prices and the disruption in supplies from the Middle East, a key source for India's crude oil, natural gas and LPG, will be fully visible in the current April-June quarter. 

Chief Economic Adviser V Anantha Nageswaran said India could return to a growth rate of more than 7% in FY28 if external conditions improve. Gross value added (GVA), which strips out volatile components such as indirect taxes and government subsidies to present a more accurate measure of underlying economic activity, grew 7.9% during the January-March quarter, data released by the MoSPI showed. 

"The fact that GVA growth at 7.9% outpaced GDP growth suggests that India's expansion was not solely demand-driven but also backed by strong production momentum," said Rumki Majumdar, economist at Deloitte India.

"We remain cautiously optimistic that tensions in the Middle East will ease over the coming months and that supply-chain disruptions will gradually subside by the end of the year," she said.

The nominal GDP or GDP at current prices is estimated to attain a level of Rs 346.36 lakh crore in 2025-26.