Is India’s Economy Really Thriving with a 7.8% GDP Growth?

New Delhi, Aug 29 (NationPress) India’s economy has maintained its vigorous trajectory in the first quarter of 2025-26 (Q1 FY26), achieving a GDP growth of 7.8 percent compared to 6.5 percent during the same timeframe last year, as reported by an industry organization on Friday.

This growth was primarily driven by the services sector, which was further bolstered by robust advancements in manufacturing and agriculture.

The PHD Chamber of Commerce and Industry (PHDCCI) noted that the nation’s growth in Q1 FY26 demonstrates resilience in the face of global challenges.

In real terms, the economy expanded by 7.8 percent, while nominal GDP saw an increase of 8.8 percent, showcasing India’s consistent progress towards its long-term objective of becoming a developed nation by 2047.

The services sector was the largest contributor, exhibiting growth of 9.3 percent.

Manufacturing also performed admirably with a 7.7 percent increase, while agriculture, livestock, forestry, and fishing grew by 3.7 percent, aided by favorable monsoons.

Gross Fixed Capital Formation, a crucial investment activity indicator, climbed by 7.8 percent, indicating a sustained investment momentum.

Government consumption spending also contributed to growth, rising by 7.4 percent in the quarter.

PHDCCI President Hemant Jain stated that India’s stable growth demonstrates strong fundamentals, with inflation at an eight-year low, a revival in rural demand, and improving urban consumption.

Declining interest rates, increased government capital expenditures, and resilient private investments have further strengthened the outlook.

The broader economic indicators also depict an encouraging scenario. The Manufacturing PMI has reached a 17.5-year high, while the Services PMI stands at an 11-month high.

Employment creation has hit record levels, with 22 lakh new formal jobs, predominantly for the youth aged 18 to 25.

The infrastructure sector is thriving, with cement production increasing by nearly 9 percent and steel consumption rising by 7.5 percent.

India's status as an investment destination continues to grow, with foreign direct investment inflows of $81 billion between April and July 2025, a surge of nearly 14 percent.

Private sector capital expenditure surged by over 66 percent during the same period, reflecting strong business confidence.

With these accomplishments, India remains the fastest-growing major economy, the world’s fifth-largest economy, fifth-largest stock market, and the third-largest startup ecosystem.

Experts are optimistic that ongoing structural reforms, enhanced ease of doing business, and strengthened supply chains will help maintain India’s growth momentum in the years ahead.