India’s economic momentum quickened in Q1FY’26, with real GDP growing by 7.8% y-o-y, higher than most estimates. A pick up in the manufacturing and services sector, combined with steady growth in the agricultural sector helped real GVA expand over this period. An abundant and spatially well-dispersed monsoon not only aided in an increase in Kharif crop acreage sown, but also replenished reservoirs.
External economic activity in the form of trade and capital flows displayed healthy trends. In August 2025, India’s total exports of goods and services recorded a growth of 9.3% y-o-y, driven primarily by a 12.2% y-o-y in services exports. Merchandise exports grew by 6.7% y-o-y.
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