India's economy grows 7.8 per cent in second quarter, beats forecasts

India's economy unexpectedly gathered strength in the April-June quarter, defying expectations of slower growth as steep US tariff hikes threaten to weigh on business activity in coming quarters.

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India's economy unexpectedly gathered strength in the April-June quarter, defying expectations of slower growth as steep US tariff hikes threaten to weigh on business activity in coming quarters.

The United States on Wednesday doubled its tariffs on Indian goods to as high as 50%, the most punishing rate among US trading partners alongside Brazil, in a move economists say could hurt exports including textiles, leather goods and chemicals.

Asia’s third-largest economy saw gross domestic product expand 7.8% in the latest quarter from 7.4% in the previous three-month period, government data showed on Friday, handily above the 6.7% expansion economists had forecast in a Reuters poll.

The gross value added (GVA), seen as a more accurate measure of underlying economic activity, grew 7.6% in the three months to June, compared with 6.8% in the previous quarter. GVA excludes indirect taxes and government subsidy payouts, which tend to be volatile.

At this pace, India remains one of the fastest-growing major economies, despite an increasingly cloudy export outlook.

Prime Minister Narendra Modi’s administration has pledged support for sectors hit by US tariffs and has said it would propose tax cuts to spur domestic demand.