India just delivered a number that made forecasters look timid. The economy expanded 7.8% year-on-year in the January-March 2026 quarter, comfortably beating consensus expectations of around 7.2% for the period.
For the full fiscal year ending March 2026, GDP growth landed at 7.7%, well above the 7.4% that most projections had penciled in. The data, released by the Ministry of Statistics and Programme Implementation on June 5, tells a story of an economy firing on multiple cylinders despite a hostile global backdrop.
What drove the surprise
The services sector was the standout performer. Trade, hotels, and transportation grew 12.5% during the quarter, a figure that reflects both pent-up consumer appetite and a structural shift toward services-driven growth.
Government expenditure also played a meaningful role. Capital spending on infrastructure projects continued to flow through the fiscal year’s final months, creating jobs and boosting demand in adjacent sectors like construction materials, logistics, and financial services.
