Key Details
The National Statistical Office’s Quarterly Estimates of Gross Domestic Product for the First Quarter of 2026–27, released by the Ministry of Statistics and Programme Implementation, provides the first GDP estimate for April–June under the revised 2022–23 base-year series.
Indicator at constant prices | Q1 FY27 growth | Q1 FY26 growth |
|---|---|---|
Real GDP | 7.8% | 6.9% |
Real GVA | 8.2% | 7.0% |
Private consumption | 7.1% | 6.8% |
Government consumption | 4.3% | 4.5% |
Gross fixed capital formation | 11.9% | 5.8% |
Exports | 12.0% | 6.0% |
Imports | -1.1% | 5.3% |
Real GDP reached ₹81.36 lakh crore, while nominal GDP increased 10.3% to ₹88.27 lakh crore.
Investment Provided the Strongest Demand-Side Impetus
Gross fixed capital formation (GFCF) — which measures investment in assets such as machinery, buildings and infrastructure — grew 11.9%, more than twice its 5.8% growth in the corresponding quarter of 2025–26.
At current prices, GFCF increased from 31.4% to 34.3% of GDP. Supporting production indicators included:
15.2% growth in capital-goods output;
27% growth in electrical-equipment production;
51.5% growth in machinery-equipment imports; and
stronger sales of commercial and goods-transport vehicles.
The data indicate a sharp increase in investment-related activity. The release does not divide GFCF growth among government, private companies and households, so it cannot establish which institutional sector drove the acceleration.
Services and Manufacturing Lifted Production
Real gross value added grew 8.2%, led by the tertiary and secondary sectors.
Financial, real-estate, information-technology and professional services expanded 12.1%, making them the fastest-growing major services group. Trade, hotels, transport and communication grew 8.5%, while public administration, defence and other services increased 7.5%.
Manufacturing growth accelerated from 8.3% to 9.2%. Construction grew 7.7%, and electricity and other utilities rebounded from a 1.8% contraction to 8.9% growth.
Together, the secondary sector expanded 8.6% and the tertiary sector 10%. This places the quarter’s production momentum primarily in industry and services, rather than the primary economy.
Agriculture Grew, but Mining Contracted
Agriculture and allied activities grew 3.6%, below the 4.4% recorded a year earlier. Total foodgrain production increased 4.8%, although wheat growth was limited to 0.5%.
Mining and quarrying contracted 2.4%, reversing the previous year’s 12.4% increase. Supporting indicators also showed a 1.2% decline in the mining index and a 4.5% contraction in fuel-mineral output.
As a result, the primary sector grew only 2.9%, substantially below manufacturing and services. Persistent weakness in mining can also affect the cost and availability of inputs for energy, construction and industry.
Consumption Remained Supportive, Without Matching Investment Growth
Private final consumption expenditure increased 7.1%, marginally faster than the 6.8% recorded in Q1 FY26. It accounted for 55.6% of nominal GDP.
The consumption signal is therefore positive but less pronounced than the investment surge. Government final consumption grew 4.3%, slightly below its year-earlier rate.
Exports grew 12% in real terms, while imports declined 1.1%. At current prices, both moved much more sharply—exports rose 25.8% and imports 30.9%—reflecting substantial changes in underlying prices. The real estimates are more appropriate for assessing changes in economic volumes.
Why GVA Grew Faster Than GDP
Gross value added (GVA) measures the value created by producers across agriculture, industry and services. GDP adds net product taxes—taxes less subsidies—to GVA.
Real GVA grew 8.2%, while real GDP grew 7.8%, because net taxes increased by a slower 3.9%. The difference does not indicate contradictory estimates; it reflects the contribution of taxes and subsidies to the GDP calculation.
The New GDP Series Changes How Manufacturing Is Measured
The estimates use 2022–23 as the base year and incorporate updated Producer Price Indices, the rebased Index of Industrial Production and newer administrative data.
Manufacturing GVA is now calculated through double deflation: output and intermediate inputs are adjusted separately for their respective price changes. This can provide a better measure of real value added when input prices and output prices move differently.
The historical quarterly series from Q1 FY23 onwards has also been updated. Comparisons should therefore use the revised figures accompanying the new series rather than growth rates published under the previous methodology. MoSPI is scheduled to publish the detailed Sources and Methods document in September 2026.
Policy Relevance
Growth quality: The combination of stronger GFCF, capital-goods production and manufacturing suggests that Q1 growth was supported by capacity-creating activity, not consumption alone. Its durability will depend on whether investment momentum continues beyond one quarter.
Sectoral balance: Mining’s contraction and comparatively slower primary-sector growth remain potential constraints. Sustained expansion will require industrial growth to coexist with reliable domestic supplies of energy and raw materials.
Evidence to watch: The next releases need to clarify the institutional source of investment growth, revisions arising from improved data and whether stronger output produces comparable gains in employment and household income. The September methodology publication will also be important for assessing changes introduced by the new GDP series.
Follow the Full Release Here: Quarterly Estimates of Gross Domestic Product for the First Quarter of 2026–27