Indian Economy Grows 7.8% in Q1, Fastest Pace in Five Quarters
India's Gross Domestic Product (GDP) grew by 7.8% in the April-June quarter of the 2025-26 financial year, marking its fastest pace in five quarters. The growth, which surpassed the RBI's projections, was primarily driven by a strong performance in the agriculture sector. With this result, India maintains its position as the world's fastest-growing major economy, significantly outpacing China's 5.2% growth during the same period, according to data from the National Statistical Office.
Unpacked:
India's GDP growth rate for the April-June 2025 quarter (7.8%) is higher than the 6.5% growth seen in the same quarter last year but still below the 9.2% annual growth recorded in 2024. Over the past decade, India's average annual growth has hovered around 6%.
The agriculture sector's robust performance was driven by favorable monsoon rains, improved crop yields, and supportive government policies. These factors boosted rural incomes and supported overall economic growth during the quarter.
India's higher growth is attributed to strong domestic demand, sectoral rebounds (like agriculture), and economic reforms. In contrast, China has faced slower growth due to a cooling property market, demographic challenges, and weaker export demand.
India's rapid growth reinforces its position as the world's fastest-growing major economy and helps it maintain its ranking as the fourth largest economy by nominal GDP and third by purchasing power parity as of 2025.