India’s economy grew by 7.8% in the December quarter

India’s economy grew at a faster-than-expected 7.8% in the quarter ended December.

A Reuters poll of economists suggested October-December gross domestic product would grow 7.2%.

The latest print comes after the government overhauled the framework for calculating economic output to improve accuracy.

In the previous quarter, India’s GDP growth rate was 8.2%, which has been revised to 8.4% under the new series. The GDP growth estimate for FY2026 has been raised to 7.6% from 7.4% earlier.

“The GDP data beat our and consensus expectations,” said Alexandra Harman, chief economist at Oxford Economics.

In January, India’s Ministry of Statistics and Program Implementation (MoSPI) introduced changes to GDP series, inflation and industrial production data to strengthen data quality, reliability and policy relevance, it said in a statement.

As part of the framework changes, the world’s fastest growing economy will shift the base year of gross domestic product from 2012 to the 2023 financial year.

Herman said the improved capture of the fastest-growing segments of the economy means that “the growth trajectory measured under the new series is structurally higher.”

Private consumption and gross fixed capital formation grew at a growth rate of over 7.0% in the current fiscal year.

“Manufacturing sector has been the key driver in contributing to the resilient performance of the economy for the 3 consecutive financial years since rebasing,” MoSPI said in a release.

In a report last year, the International Monetary Fund had raised concerns about the accuracy of the Indian government’s economic data and assigned it a “C grade” rating, its second-lowest ranking.

The IMF said in its report that the government data had limitations such as the use of an “outdated base year (2011/12)” and the use of wholesale price indices and a single deflationary to calculate inflation, all of which could distort real economic measures.

“The new GDP series largely addresses the IMF’s concerns and as a result, we expect the assessment and rating of India’s national accounts data to change,” MoSPI Secretary Saurabh Garg said in an interview to local media on Thursday.

In the December quarter, the Indian economy saw a selective rise in domestic consumption of gold and automobiles due to the festive season. However, this is the first full quarter in which Indian exporters have borne the brunt of the US’s 50% tariffs.

Indian exports to the US have been facing those tariffs since August last year, but the two countries have now agreed to an interim trade deal that will reduce the tariff to 18%.

However, the situation is further complicated after the US Supreme Court banned President Donald Trump’s tariff regime last Friday. Washington now imposes a global tariff of 10% and has threatened to raise it.

An economic survey released last month noted that India’s economic growth has not been hampered by the slowdown in exports to the US.

Textiles, marine products, gems and jewellery, auto components and leather goods are the major exports from India, which have been affected due to the US tariffs. But according to information shared by the Indian government, these products have found alternative markets.