GDP growth blows past estimates, hits 5-qtr high of 7.8%

The Indian economy grew at a significantly better than expected 7.8% in the quarter ending June, the highest this number has been in five quarters, underlining strong domestic tailwinds to growth amidst growing external headwinds from US tariffs on Indian exports.

- Roshan Kishore and Rajeev Jayaswal

While the latest GDP numbers will boost economic sentiment, they could also nudge the Reserve Bank of India to hold back on any further easing of interest rates in the near term even though inflation is expected to remain benign.

"Despite the reciprocal penal tariff, we are maintaining our growth range (of 6.3%-6.8%) for full year," chief economic adviser V Anantha Nageswaran said at a press conference after the data release.

Growing domestic consumption and strong economic fundamentals that earned India a sovereign debt ratings upgrade by S&P are reasons to be positive about the economy, Nageswaran said. "High-frequency indicators for July 2025 indicate a carry-forward of Ql economic momentum as domestic demand is expected to strengthen in the upcoming quarters with the onset of the festive period and forthcoming GST rate changes," he added.