GDP growth in Q1 likely eased after Mar-qtr high

Indicators give mixed signals ahead of 50% Trump tariffs

- SHIVA RAJORA

India's economic growth likely eased sequentially in the April-June quarter (Q1) of FY26 after clocking a four-quarter high in the March quarter of FY25, due to muted industrial output and sluggish urban demand, high-frequency indicators showed.

However, growth in Q1FY26 is expected to have drawn support from improved rural activity, healthy government expenditure, and front-loading of exports to the US before the punitive tariffs imposed by the Donald Trump administration kicked in.

Projections for Q1 gross domestic product (GDP) growth by economists varied widely, between 6.3 per cent and 7 per cent. In the March quarter of FY25, GDP grew 7.4 per cent, while in the June quarter of FY25, the economy expanded 6.5 per cent. In its bi-monthly monetary policy review on August 6, the Reserve Bank of India (RBI) projected the Q1 FY26 growth rate at 6.5 per cent. The National Statistics Office (NSO) is scheduled to release the provisional GDP estimates for Q1FY26 on August 29.

Meanwhile, agriculture is likely to have performed well, leading to an uptick in rural wages and consumption, with government capex also picking up during the quarter on the back of a low base due to the general elections a year ago.