US-Iran War, Hormuz To Global Oil Shocks: How India Beat All Odds & Predictions To Achieve 7.8% Real GDP Growth

Last Updated:August 31, 2026, 5:47 PM IST

Amid US-Iran War, Hormuz To Global Oil Shocks: India’s real GDP grew 7.8 per cent in Q1 FY27. The economic outperformance rests on 3 tactical maneuvers, News18 explains

Prime Minister Narendra Modi | File image

India’s real GDP grew 7.8 per cent in Q1 FY27, covering the April-June period. Real GDP was estimated at Rs 81.36 lakh crore in Q1 FY27, compared with Rs 75.46 lakh crore in the same quarter of FY26, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI)

The latest growth figure was also higher than the 7 per cent Q1 FY27 growth estimate earlier projected by the Reserve Bank of India (RBI). The RBI had also revised its real GDP growth forecast for the full financial year FY27 to 6.7 per cent from 6.6 per cent.

‘HERCULEAN FEAT’

Prime Minister Narendra Modi on Monday described India’s 7.8 per cent GDP growth in the first quarter of financial year 2026-27 as a “herculean feat”, saying the country’s growth came despite oil price shocks, supply chain issues and global uncertainties.

Reacting to the latest GDP data, PM Modi said the collective strength of the people helped India deliver strong economic growth despite the challenges facing the global economy.

“India’s exemplary GDP growth of 7.8 per cent during Q1 of FY 2026-27 is a herculean feat,” Modi said in a social media post.

He added that the growth came amid oil price shocks and supply chain issues, at a time when the global economy continues to face uncertainty.

“The collective strength of our people ensured India delivered such growth despite oil price shocks and supply chain issues in the midst of global uncertainties,” the Prime Minister said.

Modi also used a phrase to highlight his view that the latest growth figures had defied pessimistic expectations, saying, “Doomsayers were doomed and India bloomed…yet again!”

WHAT THE DATA STATES

The latest data showed that nominal GDP, which is measured at current prices, was estimated at Rs 88.27 lakh crore in Q1 FY27, compared with Rs 80.00 lakh crore in Q1 FY26. It registered a growth of 10.3 per cent. Real gross value added (GVA) also recorded strong growth during the quarter. Real GVA was estimated at Rs 73.82 lakh crore in Q1 FY27, compared with Rs 68.21 lakh crore in Q1 FY26, registering a growth of 8.2 per cent.

Finance Minister Nirmala Sitharaman also welcomed the latest GDP figuressaying the strong performance reflected the hard work of the people of India. She said the reforms undertaken by the NDA government, along with its management of the economy, were bearing results. “Estimated growth of real GDP in Q1 of FY 2026-27 is 7.8 per cent. Nominal GDP in Q1 of FY 2026-27 is estimated to have grown by 10.3 per cent, while Real GVA has recorded growth of 8.2 per cent,” Sitharaman said in a social media post.

The Q1 GDP estimates are subject to revisions. MoSPI said improved data coverage and revisions in input data by source agencies would have a bearing on subsequent revisions of the estimates. The next release of quarterly GDP estimates, covering the July-September quarter (Q2) of FY27, is scheduled for November 30, 2026.

WHAT HELPED INDIA SURPASS THE PREDICTIONS

Sitharaman said, “The credit for this strong performance goes to the people of India and their hard work. Reforms undertaken by the NDA Government, together with an agile management of the economy, are bearing results. The NDA Government, led by PM Shri @narendramodi, remains committed to further expanding economic opportunities for all our citizens”.

India’s recent economic outperformance rests on three tactical maneuvers:

Strategic Supply Rerouting: As the West Asian conflict disrupted major trade channels, India rapidly diversified and rerouted its crude oil, petroleum products, and fertilizer imports away from the vulnerable Strait of Hormuz to maintain industrial continuity.

Aggressive Fiscal Cushioning: Rather than letting international commodity spikes pass directly to consumers, the government insulated factories and households. It heavily subsidized fertilizers for farmers and absorbed price shocks via state-owned refiners.

Capital Expenditure Push: Frontloaded government spending on public infrastructure acted as a major catalyst, drawing in private real estate, finance, and manufacturing sectors while offsetting global macro gloom.

MACROECONOMIC SNAPSHOT (Q1 FY 2026–27)

The table below breaks down the key economic performance indicators released by the Ministry of Statistics & Programme Implementation:

WHAT ECONOMISTS SAY

Growth continues to be supported by a combination of domestic consumption tax cuts implemented late last year and targeted safety nets, though rural vs. urban consumption levels require ongoing stabilization. Independent institutes and research groups (such as the PIIE) periodically debate long-term GDP deflators and the statistical weighting of India’s large informal sector relative to its high-performing formal economy.

Continued reliance on crude imports means sustained military tensions globally keep local equity markets cautious, requiring the RBI to remain nimble with liquidity management.

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Could global oil prices impact India’s economy going forward?

Yes, global oil prices could impact India’s economy going forward, as India relies heavily on imported oil. A $10 rise in global crude oil prices could reduce India’s GDP growth by approximately 0.5 percentage points.

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Manjiri Joshi

At the news desk for 20 years, the story of her life has revolved around finding pun, facts while reporting, on radio, heading a daily newspaper desk, teaching mass media students to now editing speci…Read More

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