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India remained the fastest-growing major economy in the April-June quarter of 2026, with real GDP growth of 7.8 per cent, significantly ahead of other major economies including China, the United States and several large European economies.
As per official data, India's growth rate was well above China's 4.3 per cent during the same period (April-June). Malaysia and Singapore recorded growth of 6 per cent and 5.9 per cent, respectively, while Indonesia grew 5.29 per cent and South Korea 3.7 per cent. The gap was even wider against the US, where growth stood at 2.1 per cent. The UK also grew 2.1 per cent, while Canada expanded 1.5 per cent. Among major European economies, Germany grew 1 per cent, Italy 0.8 per cent and France 0.5 per cent. Japan also recorded growth of just 0.5 per cent. The stronger performance comes as India's domestic economy continues to show broad-based momentum. The rising demand across both urban and rural markets, with vehicle sales providing a clear sign of stronger economic activity. As per the latest data, domestic passenger-vehicle sales reached 4.58 lakh units in July, up 34.3 per cent from a year earlier and the highest level for the month. Retail tractor sales rose 28.1 per cent to 1.17 lakh units, also a record for July, while two-wheeler retail increased 28.3 per cent to 18.18 lakh units. Commercial-vehicle sales grew 24 per cent YoY, pointing to stronger movement of goods and business activity. Other indicators also point to a wider expansion. The GST revenue increased 15.4 per cent in July, digital-payment volumes rose 16.6 per cent, electricity demand increased 10.7 per cent, while petrol and diesel consumption rose 9.2 per cent and 10 per cent, respectively. Higher demand is also feeding into industrial activity. Industrial production grew strongly in July, while manufacturing output increased, with 19 of 23 manufacturing groups recording growth. Investment activity is showing similar strength. Capital-goods production increased 16.1 per cent, while capital-goods imports rose 25.5 per cent. Infrastructure and construction goods grew 6.9 per cent, while cement production increased 13.1 per cent. The combination suggests that businesses are not only responding to current demand but are also adding capacity for future growth. India's export performance is providing another source of momentum. Merchandise exports rose in July to USD 44.24 billion, the highest-ever export value for the month. Engineering-goods exports increased 17.7 per cent, while electronics exports jumped 57.4 per cent and chemical exports rose 14.4 per cent. The banking system is also supporting the expansion. Overall bank credit grew at its highest pace in more than a decade in the first quarter of FY26. Public-sector banks also moved ahead of private-sector banks in credit growth for the first time in 14 years. At the same time, public-sector banks reported a record Rs 1.98 lakh crore in net profit in FY2025-26, while their gross bad-loan ratio fell to a historic low of 1.9 per cent. The growth momentum is also being accompanied by stronger investment from overseas. Gross inward FDI reached about USD 30.7 billion in April-June 2026; this is the strongest quarterly inflow in at least 15 years. At the same time, India's economic expansion has not been accompanied by a sharp rise in consumer inflation. Retail inflation stood at 4.45 per cent in July, while core inflation eased to 4.15 per cent. Together, strong domestic demand, rising industrial production, higher investment, faster credit growth, record exports and stronger foreign investment are supporting India's 7.8 per cent growth rate. The wide gap with China, the US and major European economies highlights the relative strength of India's economic expansion at a time when growth in several other large economies remains much slower. (ANI)
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