India's GDP Growth Surges Despite Oil Shock Controversy

India's GDP growth defied expectations by reaching 7.8%, beating forecasts and sparking controversy over its credibility.

The government has attributed this success to a cyclical growth recovery driven by fiscal stimulus, including direct tax cuts in February last year and interest rate reductions of about 1.5% since early 2023.

Economist Sajjid Chinoy from JP Morgan noted that India's ability to insulate its recovery from the Middle East oil shock, achieved through rapid diversification of energy imports, deserves significant credit.

Exports grew by a sharp 12%, despite tariff uncertainties, driven by strong global demand and a weak exchange rate. Private corporate investments also surged, with gross fixed capital formation rising nearly 12% in the first three months of this year.