New Delhi: India’s economy registered a strong 7.8 percent growth in the April–June quarter of the financial year 2025–26, beating forecasts and marking a five-quarter high. The performance, driven by robust growth in services, manufacturing, and construction, comes amid global trade tensions and recently imposed tariffs on Indian exports by the United States.
According to government data, services expanded by 9.3 percent, manufacturing by 7.7 percent, and construction by 7.6 percent. Agriculture posted moderate growth of 3.7 percent, while the mining sector contracted by 3.1 percent. Nominal GDP grew at 8.8 percent during the period.
Prime Minister Narendra Modi, addressing the Semicon India 2025 conference in New Delhi, hailed the figures as proof of the country’s resilience against what he described as the “economic selfishness” of certain nations. The remark was seen as a reference to the new U.S. tariffs, which include 50 percent duties on Indian goods. Modi reiterated his government’s vision of India becoming the world’s third-largest economy in the coming years and stressed the strategic importance of semiconductors in shaping the future.
“Oil shaped the last century, but in the 21st century, true power lies in the small chip,” Modi said, underlining India’s growing role in semiconductor manufacturing and digital innovation.
Economists have welcomed the growth but urged caution. Chief Economic Advisor V Anantha Nageswaran described the numbers as evidence of macroeconomic stability, while former RBI Deputy Governor Michael Patra emphasized that the growth was achieved largely through domestic resources. He called for greater private sector investment to sustain momentum and move closer to an 8 percent target.
Stock markets responded positively, rebounding after earlier losses, though analysts warned that challenges remain, including U.S. tariffs, a weakening rupee, and subdued corporate earnings. International observers noted that while government spending and farm output supported growth, risks loom from slowing exports and global economic uncertainty.
Despite these concerns, India’s performance highlights the country’s strong economic fundamentals. The government continues to view trade headwinds as an opportunity for reform and a chance to reinforce domestic industries. With the semiconductor sector positioned as a key pillar, India is aiming to transform its growth momentum into long-term and sustainable global economic leadership.