India's economy surges: GDP growth hits 7.8%, beats expectations

India's economy grew 7.8% year-on-year in the April-June quarter, beating the 7.1% growth forecast. The figure was also higher than the RBI's projection of 7%, although growth moderated from 8.6% in the previous quarter. The stronger-than-expected performance gives India a solid start to the financial year 2027, with domestic demand, investment and industrial activity supporting overall growth. The underlying picture remained strong, with gross value added rising 8.2% in the first quarter. Manufacturing growth accelerated to 9.2%, while financial services expanded 12.1%, supported by stronger bank credit. Credit growth across agriculture, industry and services reached 18.3% at the end of June, the strongest pace in more than a decade. Government capital expenditure, construction and exports also contributed to economic activity. The strong growth comes despite elevated energy prices, geopolitical tensions and uncertainty around global trade. Tax cuts have supported consumer demand, but the prolonged Gulf conflict could weigh on corporate investment and capacity expansion. Higher oil prices remain a major risk for India because of its heavy dependence on crude imports, potentially raising input costs and inflation. The focus now shifts to whether private investment, consumption and exports can sustain the momentum. For now, the 7.8% growth indicates that India's domestic economy remains resilient, despite a challenging global environment.