India GDP grows 7.8% in April-June quarter

India's gross domestic product grew 7.8 percent in the April-June quarter from a year earlier, official data showed on Monday, as services helped sustain growth in Asia's third-largest economy.

The statistics ministry data showed the pace eased from a revised 8.6 percent in the previous quarter. Teresa John of Nirmal Bang Institutional Equities told AFP that growth was led by services and that manufacturing grew 9.2 percent.

Prime Minister Narendra Modi called the figures a “herculean feat” and said they came despite “oil price shocks and supply chain issues”.

The reading comes as India faces pressure from the Iran war, which has raised energy costs and India's import bill. New Delhi depends heavily on imported oil and gas, making it vulnerable to global energy shocks.

India's central bank initially cut growth projections for the current fiscal year after assessing the Middle East turmoil, then later revised them slightly upward. The government has limited the economic impact on households with staggered fuel price hikes, but analysts have warned that renewed Middle East tensions and elevated crude prices could test that approach.

Modi's government has also faced political and economic strains, including student protests over a national exam scandal, concerns about jobs for graduates and pressure on the rupee. The central bank and finance ministry have taken steps to attract dollar inflows, including a deposit scheme for non-resident Indians that had brought in more than $65 billion by late August, but the rupee has remained under pressure.