India has delivered a blistering economic performance, beating all expectations and cementing its place as the world’s fastest-growing major economy. Fresh government data on Friday showed GDP racing ahead at 7.8 per cent in the April to June quarter, the fastest pace in five quarters and well above forecasts of around 6.7 per cent.

The strong data comes just two days after Donald Trump’s administration imposed punishing new tariffs, doubling duties on Indian imports to 50 per cent.

Some economists say the sheer strength of this growth offers India a buffer. The robust numbers, they argue, give the economy a cushion to absorb the initial shock of the tariff hike, even as risks loom.

Madhavi Arora, lead economist at Emkay Global, called the growth numbers “a super print” but warned the tariff blow could not be ignored.

“The effective macro hit from the 50 per cent tariff imposition will start to feed via exports and have a domino effect on employment, wages and private consumption,” Arora said.

Even so, she noted that government plans to cut GST could help soften the blow.

Capital Economics said the surprise spurt meant “the economy is still on course to expand by a world-beating 7 per cent this year, despite the upcoming hit from punitive US tariffs.”

The GDP surge was not driven by one sector alone. Manufacturing jumped 7.7 per cent, construction climbed 7.6 per cent, and agriculture grew a solid 3.7 per cent. The real star was services, which expanded 9.3 per cent, the fastest in two years.

“This growth rate will provide a major cushion to any downside that the economy could witness due to the effect of higher tariff imposition,” said Madan Sabnavis, chief economist at the Bank of Baroda. “Growth was expected to be buoyant this quarter, but this performance has been beyond expectations.”

But storm clouds loom. The 50 per cent tariff threatens labour-intensive sectors such as jewellery, gems, textiles and shrimp exports, which depend heavily on the US market.

Sujan Hajra, chief economist at Anand Rathi Financial Services, said that while the tariff poses risks, India still shines globally: “If economic reforms gain traction and inflation stays modest, India will continue to stand out as the most compelling macro story in a gloomy world.”

Others are less optimistic. Analysts warn the tariffs could shave as much as a full percentage point off growth next year, not only by hurting exports but also by pulling down household spending in regions tied to export-led jobs.

“Even as India’s exports to the United States amount to a modest 2.3 per cent of GDP, the sectoral impact of the tariffs will be asymmetrical,” cautioned Radhika Rao, senior economist at DBS Bank.

The rupee has already felt the sting, sinking to a record 88.18 per dollar on Friday, while India’s stock markets were closed for the Ganesh Chaturthi holiday.

Aditi Nayar, chief economist at ICRA, warned momentum could slow. “Lower year-over-year momentum of government capital expenditure and the looming hit to exports from the US tariff and penalties would dampen growth prints in the coming quarters,” she said.

“Amidst continuing uncertainty, we maintain our baseline GDP growth forecast at 6.0 per cent for the current fiscal year,” Nayar added.

Economists also stress the impact on workers. If jobs vanish in textiles, jewellery and leather, industries that power household incomes, India’s rural demand and consumption, the backbone of recent growth, could falter.

With exports under pressure, policymakers are likely to lean on domestic investment and public spending to keep momentum alive. The Reserve Bank of India is seen holding interest rates steady, putting the burden of support on fiscal policy.

Nayar said the stronger-than-expected GDP print “has doused any expectations that the tariff-related turmoil could prompt monetary easing in the October 2025 policy review.”

Looking ahead, some economists warn that the early buoyancy may fade and this is as good as it is going to get.

“The first-quarter numbers have surprised all,” said Sachchidanand Shukla, group chief economist at Larsen & Toubro. “However, the bigger takeaway is that one should not really be carried away by the numbers. This is the ceiling when it comes to growth, and it will trend down through the rest of the year.”