India's gross domestic product grew 7.8% in the quarter ended June 30, outpacing consensus estimates of 7% to 7.2%, according to a Ministry of Statistics and Programme Implementation release published Sunday.
The beat came as financial services, real estate and information technology combined for 12.1% growth, offsetting headwinds from geopolitical disruption and weather. Professional services contributed to broader strength in the services sector, which has driven Indian expansion for eight consecutive quarters at rates between 7.5% and 8.2%.
India's latest reading places it among the fastest-growing large economies globally. China expanded 5.3% in the same period. The Reserve Bank of India had projected 7% growth for the quarter; the actual figure exceeded that forecast by 80 basis points.
The financial and real estate sectors accounted for the largest portion of the upside. Financial services, including banking and insurance, has expanded faster than headline GDP growth in 11 of the past 12 quarters as domestic credit expansion and foreign capital inflows accelerated. Information technology exports held steady despite global demand uncertainty, with software services shipments remaining flat year-over-year at roughly $24 billion for the three-month period.
Growth in the preceding quarter, January to March 2026, stood at 7.2%. The current quarter's 7.8% figure means year-over-year headline growth has stayed within the 7.5% to 7.8% band for five consecutive periods.
The government's capital expenditure remained high, with public infrastructure spending up 14% in the quarter. Private investment remained subdued relative to 2025, with corporate capex growing 3.2% annually.
Services now account for 60% of headline GDP versus 45% a decade ago. If services growth sustains above 7.5% for four more consecutive quarters, the broader services sector will have outperformed goods production for 16 straight periods, a structural shift away from manufacturing that economists have tracked since 2020.
The document to watch is India's second-quarter GDP release, due in November 2026, to confirm whether the beat reflects sustained services growth or a one-quarter data anomaly.
