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India Q1FY27 GDP grows 7.8%, but recovery looks uneven
Systematix said the faster print may be driven largely by government spending and formal-sector indicators, while manufacturing and agriculture see weaker nominal contributions.
India’s GDP grew 7.8% in Q1FY27, outpacing a Mint poll estimate of 7.4% and adding to the optimism around the economy’s resilience, according to analysis cited by LiveMint Markets. The report notes the economy was operating amid a West Asian conflict that began on 28 February, a weak monsoon influenced by the El Niño effect, and US tariff-related uncertainties.
Systematix pointed to revisions in prior data, saying Q4FY26 GDP was revised upward to 8.6% from 7.8%. It also raised concerns that GDP growth may be overstated because GDP estimation relies heavily on formal-sector indicators that can diverge from broader lived conditions.
The brokerage firm said GVA expanded 8.2% and real GDP growth accelerated to 7.8%, but it highlighted that the composition of growth looks lopsided. It cited the dominance of services, with services’ nominal GVA share rising to 55.7% in Q1FY27 while manufacturing’s nominal share fell to 12.9%, a multi-decade low, despite real manufacturing growth of 9.2%.
On investment and government support, Systematix said gross fixed capital formation in Q1FY27 could be largely government-led, with Government of India spending up 11% year-on-year to ₹ 13.5 lakh crore and capital expenditure rising 24%. It added that agriculture’s nominal GVA share declined to 17.4%, with real agriculture growth of 3.6% despite a deficient monsoon.