Uday Kotak’s cautionary message as Indian economy grows 7.8% in April-June quarter: 'Let us not lower guard'

India’s economic growth at 7.8% in the April-June quarter has shown the country’s resilience amid global uncertainties, but challenges including tensions in West Asia and the rapid adoption of artificial intelligence, Kotak Mahindra Bank founder Uday Kotak said on Tuesday.

“India GDP growth Q1 (April-June) at 7.8%. This was the peak period of Iran conflict. India has shown resilience vis a vis concerns in March and April,” Kotak said in a post on X.

He said India had also “bought insurance” with more than $100 billion in foreign currency deposits with three to five-year maturities.

“However, Middle East is still unresolved, AI game is full on, and US bond yields are playing truant,” Kotak said.

“For us, it is time to feel better, but have work to do, and let us not lower guard,” he added.

The Ministry of Statistics and Programme Implementation (MoSPI) said real GDP, measured at constant 2022-23 prices, was estimated at ₹81.36 lakh crore in Q1 FY27, up from ₹75.46 lakh crore in the year-ago period.

Nominal GDP at current prices grew 10.3% to ₹88.27 lakh crore in the quarter from ₹80 lakh crore a year earlier.

“Indian economy has sustained growth momentum despite global headwinds,” MoSPI said.

ICRA said the Q1 FY27 GDP growth had surprised on the upside and raised its forecast for full-year growth to 7.1% from 6.7% earlier.

The rating agency said the 7.8% growth was higher than its forecast of 7%, though it marked a moderation from the upwardly revised 8.6% growth recorded in Q4 FY26.

Gross value added (GVA) growth also moderated to 8.2% in the first quarter from 8.7% in the previous quarter, led by slower growth in services, ICRA said.

ICRA said the latest national accounts data also incorporated updated industrial output and producer price indices, banking services price index and updated administrative data.

While annual GDP growth underwent marginal revisions, quarterly data showed material differences from the initial estimates, it said.

The agency said the strong first-quarter growth supported its upward revision of the FY27 growth forecast, although risks from a poor monsoon and prolonged tensions in West Asia remained.

The Q1 GDP expansion also reflected slower growth in private and government final consumption expenditure and a drag from net exports, ICRA said.

Nominal GDP growth was 10.3% year-on-year in Q1 FY27, amid a low 2.5% deflator, it added.