India remains the fastest-growing major economy, as China’s GDP growth in the April-June period was 5.2 per cent
Commerce and Industry Minister Piyush Goyal on Friday said the government will soon announce measures to boost exports and domestic consumption, underlining its commitment to shield the industry from the adverse impact of unilateral actions by other countries.
New Delhi: Indian economy grew by 7.8 per cent in April-June — the highest in five quarters — before the disruptive US tariffs were imposed.
The GDP growth in the first quarter of the ongoing fiscal year was mainly due to good showing by the farm sector, as per government data.
India remains the fastest-growing major economy, as China’s GDP growth in the April-June period was 5.2 per cent.
The previous highest GDP growth was 8.4 per cent in January-March of 2024, as per the data.The agriculture sector recorded a 3.7 per cent growth, up from 1.5 per cent in the April-June period of 2024-25, as per the National Statistical Office (NSO) data released on Friday.
However, manufacturing sector growth marginally increased to 7.7 per cent in the first quarter of FY26 compared to 7.6 per cent in the year-ago period.
Earlier this month, the Reserve Bank of India had projected real GDP growth for 2025-26 at 6.5 per cent, with Q1 at 6.5 per cent, Q2 at 6.7 per cent, Q3 at 6.6 per cent, and Q4 at 6.3 per cent.
The World Bank and IMF have pegged India’s growth at 6.3% and 6.4% respectively in FY26, keeping the country among the world’s fastest-growing economies.
“Real GDP or GDP at Constant Prices in Q1 of FY 2025-26 is estimated at Rs 47.89 lakh crore, against Rs 44.42 lakh crore in Q1 of FY 2024-25, registering a growth rate of 7.8%. Nominal GDP or GDP at Current Prices in Q1 of FY 2025-26 is estimated at Rs 86.05 lakh crore, against Rs 79.08 lakh crore in Q1 of FY 2024-25, showing a growth rate of 8.8%,” the official press release stated.
Chief Economic Advisor V Anantha Nageswaran on Friday exuded confidence that the Indian economy will grow at 6.3-6.8 per cent in the current fiscal as proposed GST rate cut is expected to aid consumption, even though steep US tariffs pose a downside risk.
Briefing reporters after the April-June GDP growth data was released by the statistics ministry, Nageswaran also said that the 25 per cent penal tariff imposed by the US on Indian goods will be “short-lived” as both the countries are currently negotiating on it.
“There is some uncertainty with respect to the additional tariff with respect to the Russian crude oil would last, but in general conversation is going on, and there is expectation that we will see some kind of a resolution in not so distant future. We do believe that growth target for current fiscal, especially in lines of strong showing by economy in first quarter, we retain the 6.3-6.8 per cent range for current fiscal,” Nageswaran said. The Economic Survey tabled in parliament in January had projected real economic growth of 6.3-6.8 per cent for FY26.
“There could be some downside risks to the (growth) projections if the (penal) tariffs remains for a longer period, but we are hopeful it would be resolved sooner,” he said.
Nageswaran said the impact of penal tariffs in economic activity would be concentrated in second quarter (July-September).
“The removal of the uncertainty may unleash higher growth in the third and fourth quarters compensating the impact of second quarter,” Nageswaran said, adding that it is difficult to estimate the downside impact of high tariffs on growth as the situation is uncertain.
Various private sector estimates put the downside risks to GDP growth in the range of 0.2-1 per cent if high tariffs continue. Nageswaran said the impact of penal tariffs in economic activity would be concentrated in second quarter (July-September).
“The removal of the uncertainty may unleash higher growth in the third and fourth quarters compensating the impact of second quarter,” Nageswaran said, adding that it is difficult to estimate the downside impact of high tariffs on growth as the situation is uncertain.
Various private sector estimates put the downside risks to GDP growth in the range of 0.2-1 per cent if high tariffs continue.
Measures soon to boost exports Govt committed to shield industry from unilateral actions Goyal
Meanwhile, Commerce and Industry Minister Piyush Goyal on Friday said the government will soon announce measures to boost exports and domestic consumption, underlining its commitment to shield the industry from the adverse impact of unilateral actions by other countries.
The remarks are important as the US has imposed a steep 50 per cent tariff on Indian goods entering America from August 27.
According to exporters, shipments from labour intensive sectors such as shrimp, chemicals, leather and footwear would be hit from these tariffs.
Goyal assured exporters of all support in dealing with the current global uncertainties at the trade front, which were caused by the imposition of high tariffs.
“The government is committed to make sure that all of you do not face any stress or difficulties in managing the current situation emanating from some unilateral actions,”
Goyal said here at an industry event.
He urged the industry to highlight sectors that may get impacted by these tariffs and need alternative markets.
“We in the commerce ministry, through our Missions, are reaching out to other parts of the world, to look at other opportunities which we can capture. We are also looking at giving a boost to domestic consumption.”
“You will soon see the GST council meeting next week… So that the impact of these changes can be felt by all of you very quickly and that can give a quick demand booster to the entire domestic manufacturing sector,” the minister said.
The upcoming GST Council meeting, he noted, is expected to provide measures that will quickly stimulate demand and give a strong boost to domestic manufacturing.
The government is in consultation with all the stakeholders, including Indian Missions abroad, for diversification of exports, he said.
“I can assure each one of you that in the days ahead, the government will be coming out with a variety of measures to support every sector, both to expand the domestic outreach and look for complementarities in other markets around the world to expand our global foray so that this year, our exports will exceed last year’s exports.
“This year will define our self-confidence,” the minister added.
In 2024-25, India’s goods and services exports touched an all-time high of USD 825 billion.
Further, he said, India’s exports share in the global market is low, so “we do not need to worry” too much about the global uncertainties at the trade front.
If a country wants to do a good trade pact with India, “we are always ready” for that, Goyal said, adding if “someone tries to discriminate against us… I feel that India’s 140 crore population has self-confidence and self-respect, keeping that in mind, we will never bow down, nor will we ever be weak, together we will keep moving ahead…
“We will capture new markets… I can say with confidence that this year our exports will be more than last year”.
He added that India is an import-dependent economy.
The country, Goyal said, has managed crises such as Covid-19 pandemic and nuclear sanctions successfully in the past.
Addressing construction sector players, he said there is a demand for about one million houses in Australia.
He invited Indian businesses, workers, and experts to seize this opportunity, stating that Australia is open to financial collaboration, technical expertise, and workforce support from India.