GDP growth of 7.8% signals sustained momentum despite global headwinds: Nirmal Minda

India’s stronger-than-expected 7.8% economic growth in the first quarter of FY27 demonstrates the resilience of the economy despite geopolitical tensions, higher global energy prices and uncertain global economic conditions, ASSOCHAM President Nirmal K. Minda said.

Minda said the growth performance, led by manufacturing, services and construction, was particularly encouraging given the headwinds from conflicts in West Asia and elevated energy prices. “The GDP growth of 7.8%... is highly inspiring,” he said, adding that the economy’s growth trajectory of above 7% could continue through the current financial year.

Manufacturing and services drive growth

The 7.8% expansion in real GDP in Q1FY27 was supported by a 9.2% rise in manufacturing, 10% growth in the tertiary sector and 7.7% expansion in construction, according to Minda.

He noted that the latest numbers were in line with ASSOCHAM’s assessment earlier in April that India’s economy could grow by more than 7% in FY27 despite global uncertainties.

“The GDP growth is moving in the same direction,” Minda said, pointing to the economy’s ability to sustain growth despite external pressures.

Investment momentum strengthens

Investment activity also showed a sharp improvement during the quarter. Gross fixed capital formation grew 20.4% in Q1FY27, compared with 5.4% in the corresponding period last year.

According to Minda, the acceleration in capital formation is a positive signal for investment and could translate into greater employment opportunities in the economy.

The strong investment performance was accompanied by an improvement in consumption demand. Private final consumption expenditure grew 9.9% in Q1FY27, up from 8.3% in the same quarter a year earlier.

Government consumption also accelerated sharply, with government final consumption expenditure rising 9.5% during the quarter compared with 4% in Q1FY26.

Minda said the combination of stronger consumption and investment activity was encouraging for the economy’s growth prospects.

Looking ahead, ASSOCHAM said India remained on course towards its Viksit Bharat goal, with sustained economic growth, improving ease of doing business and healthy consumption and investment activity providing support to the expansion.