GDP growth in Q1 quickens to five-quarter high of 7.8%, buoyed by cross-sector strength

India’s economic growth rate in the first quarter (April-June) of the current financial year quickened to a five-quarter high of 7.8%, driven by a cross-sector acceleration including in manufacturing, construction and services. 

Growth in the Gross Domestic Product, as shown by the data released by the Ministry of Statistics and Programme Implementation on Friday (August 29, 2025), was last quicker during the quarter ended March 2024. 

Growth in the manufacturing sector quickened to 7.7% in the April-June 2025 quarter, coming on top of a high base of 7.6% in the same quarter of the previous year. This was also faster than the 4.8% growth the sector saw in the January-March 2025 quarter.

The construction sector, too, saw growth coming in at 7.6% in Q1 of this financial year, on a high base of 10.1% in Q1 of last year. The electricity, gas, water supply & other utility services sector, however, saw growth slow sharply to 0.5% in Q1 of this financial year, from 10.2% in the same quarter of the previous year.

The quarter’s GDP growth was also propelled by the services sector, which on a combined basis grew 9.3% in the April-June 2025 quarter, faster than the 6.8% seen in the same quarter of last year, or the 7.3% growth in the immediately preceding quarter. 

Within this, the Public Administration, Defence & Other Services sector saw the growth accelerating to a three-year high of 9.8% in Q1 of 2025-26, coming on top of a 9% growth in Q1 of the previous year. 

The Financial, Real Estate & Professional Services sector grew at 9.5% in Q1 of 2025-26, a two-year high. Similarly, the Trade, Hotels, Transport, and Communication Services sector grew at 8.6%, also a two-year high.