India's Q1 GDP grows 7.8%, industry leaders urge investment push

Industry leaders hail India's robust 7.8% Q1 GDP growth, call for sustained investment push

New Delhi, September 1

Industry representatives and economists observed that the first-quarter expansion outperformed market estimates and reflected healthy domestic underlying economic strength.

Speaking to ANI, Secretary General of the Associated Chambers of Commerce and Industry of India, Saurabh Sanyal, noted that the growth trajectory matched industry projections made earlier in the year.

"We had already predicted that the growth, as compared to Q4, will continue to grow and we had given this statement in April 2026 that it will be more than 7 per cent and as expected, the growth rate today, which has been achieved in Q1 in the GDP, is 7.8 per cent," Sanyal said.

He noted that the current pace remains sustainable due to wide-ranging reforms initiated by the government.

"Yes, it is the private sector which has come now for investments, looking at the streamlining of the reforms and policies, very proactive and progressive policies, which have been announced by the government of India in the recent parliamentary sessions, as also in the past one year. And therefore, the domestic investments have started pouring in," Sanyal added.

Chief Economist at Infomerics Ratings, Manoranjan Sharma, stated that the GDP numbers confirmed strong underlying economic fundamentals.

"These are very welcome numbers and are in line with our expectations. Real GDP growth has risen to 7.8 per cent from 6.9 per cent last year. Now, this kind of growth is particularly encouraging, suggesting that the expansion reflects a genuine improvement in economic activity rather than merely price effects," Sharma told ANI.

Sharma pointed out that maintaining this level of expansion over the medium term would require focused domestic interventions.

"Going forward, sustaining a growth of almost in the region of 8 per cent will require stronger private investment, productivity growth, manufacturing momentum, exports, and employment generation," he said.

Highlighting the structural policy requirements, former part-time member of the Economic Advisory Council to the Prime Minister, Surjit Bhalla, told ANI that bridging the growth gap and unlocking an additional 2 per cent GDP potential hinges primarily on raising investment levels.

"So right now our investment-to-GDP ratio is close to 28-30 per cent of GDP. That will give us on a long-term basis a 6.5 per cent growth. If you want to raise it, then you need to raise the investment rate to somewhere around 34-35 per cent of GDP in order to accelerate the rate of growth," Bhalla said.

Bhalla added that external factors also dictate investment requirements, noting that the effectiveness of investment is a function of global conditions.

"If global conditions are very favorable, then you may find that you can achieve a higher growth rate with a lower rate of investment. But if the global conditions are as they are now, and expected to not improve much and may even get worse, then you definitely need to step up the investment rate," Bhalla observed.

Speaking to ANI, Chief Economist at CareEdge, Rajani Sinha, noted that the robust performance in the opening quarter had prompted an upward revision of the full-year outlook despite expectations of some moderation in subsequent quarters.

"We were expecting Q1 at around 7.3 per cent and the actual data has turned out better than expectations. But going forward, we are expecting some moderation in the GDP growth number in Q2 and Q3. But overall, we are still expecting the growth for the full year to be quite healthy. We were expecting growth of around 7 per cent but now with Q1 number better than what we were expecting, we feel now the growth can go as high as around 7.3 per cent," Sinha said.

— ANI