What sectors drive India's GVA growth?

India's Gross Value Added (GVA) expanded by 8.2% in real terms (reaching ₹73.82 lakh crore) and 11.5% in nominal terms (₹80.53 lakh crore) in Q1 FY 2026–27. Growth across the economy is broad-based, led by strong momentum in services and manufacturing.

1. Tertiary Sector (Services) – The Primary Growth Engine

Services remain the largest contributor to India's economy, accounting for 55.7% of total nominal GVA and registering an overall real GVA growth of 10.0% in Q1 FY 2026–27 (up from 8.0% in Q1 FY 2025–26):

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Financial, Real Estate, IT, and Professional Services: This sub-sector was the fastest-growing segment in the economy, expanding by 12.1% in real GVA terms. Growth was propelled by strong credit growth, digital financial expansion, buoyant capital markets, and solid demand for IT and business services.

Trade, Hotels, Transport, Communication, and Broadcasting: Recorded a real GVA growth of 8.5%, supported by resilient domestic consumption and travel activity.

Public Administration, Defence & Other Services: Expanded by 7.5% in real GVA terms.

2. Secondary Sector (Industry) – Robust Manufacturing & Construction

The secondary sector expanded by 8.6% in real GVA terms during Q1 FY 2026–27, accelerating from 6.1% in the same quarter of the previous year:

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Manufacturing: Real GVA grew by 9.2%, supported by capacity utilisation gains, import substitution, and government initiatives like the Production Linked Incentive (PLI) schemes. Key manufacturing drivers included:

Electrical Equipment: +27.0% YoY output growth.

Other Transport Equipment: +19.5% YoY output growth.

Computers, Electronic & Optical Products: +12.4% YoY output growth.

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Machinery & Equipment: +9.1% YoY output growth.

Utilities (Electricity, Gas, Water Supply): Rebounded strongly to 8.9% real GVA growth (compared to a -1.8% contraction in Q1 FY 2025–26).

Construction: Grew by 7.7% in real GVA terms and 16.5% in nominal GVA terms, driven by robust public infrastructure spending and private housing development.

3. Primary Sector (Agriculture & Mining) – Steady Agricultural Output

The primary sector recorded an overall real GVA growth of 2.9% in Q1 FY 2026–27:

Agriculture, Livestock, Forestry & Fishing: Expanded by 3.6% in real GVA terms, supported by favourable monsoon conditions and healthy crop output.

Mining & Quarrying: Contracting by 2.4% in real GVA terms due to output deflator dynamics, the sector nevertheless registered a high nominal GVA growth of 22.3%, driven by sharp price surges in crude petroleum, natural gas, and metal ores.