India's June Quarter GDP Grows 7.8% Despite West Asia War, High Energy Prices

India’s economy recorded 7.8% growth in the June quarter, according to data released by the Ministry of Statistics and Programme Implementation on August 31.

Although growth slowed from 8.6% in the preceding quarter. Gross value added (GVA), which tracks the value generated across economic activities, increased 8.2%, compared with 8.7% in the previous quarter.

The services sector remained the strongest contributor to growth, expanding 10% during the quarter, compared with 8% in the corresponding period a year earlier.

Manufacturing activity also remained robust, growing 9.2%, while the construction sector expanded 7.7%. Trade, hotels, transport, communication and broadcasting services recorded growth of 8.5%.

The financial, real estate and professional services segment registered particularly strong growth of 12.1%. Public administration, defence and other services grew 7.5%.

Agriculture, forestry and fishing posted more moderate growth of 3.6%.

Investment Provides Support Amid Global Uncertainty

The latest economic performance came against the backdrop of the West Asia conflict and elevated energy prices, which have created external pressures for the Indian economy. However, government capital expenditure and domestic investment continued to support economic activity.

On the expenditure side, private final consumption expenditure, an indicator of household spending, increased 7.1%, suggesting continued resilience in domestic demand.

Investment activity remained stronger, with gross fixed capital formation rising 11.9% during the quarter. Government final consumption expenditure increased at a slower pace of 4.3%.

The stronger-than-expected GDP performance highlights the continued contribution of services, manufacturing and investment to India’s growth momentum, even as geopolitical risks and higher energy costs remain key challenges for the economy.