India's economic expansion unexpectedly slowed in the three months to March and thus, the country lost its claim of having the fastest growing economy in the world.
Gross domestic product grew 6.1 percent year-on-year after 7 percent expansion in the previous three months, preliminary data from the Central Statistics Office showed Wednesday.
In contrast, economists had expected an improvement in the growth rate to 7.1 percent.
During the first three months of the year, China's economy grew 6.9 percent.
The CSO also estimated that the economy grew 7.1 percent in the fiscal year ended March 31, in line with earlier official estimates.
Growth for the year 2015-16 was revised to 8 percent from 7.9 percent.
Latest data puts a damper on the euphoria surrounding the completion of three years in power of the pro-business Narendra Modi government.
The period saw some drastic economic measures such as the currency demonetization in a push against the illicit money and the start of the implementation of the Goods and Services Tax.
"The pace of growth recorded by the national accounts data seems reasonable," Capital Economics economist Shilan Shah said.
Shah pointed out that the slowdown in growth does not tally with other evidence which has tended to suggest that growth stabilized or picked up in the March quarter.
"It is presumably linked to the disruption caused by demonetization though and, in that light, the key point is that more recent data suggest that activity has since continued to recover," Shah said.
Manufacturing growth slowed to 5.3 percent from 8.2 percent in the March quarter, while farm growth eased to 5.2 percent from 6.9 percent.
Construction was the only sector to register contraction, shrinking 3.7 percent after 3.4 percent growth in the previous three months.
Growth in financial, real estate and professional services slowed to 2.2 percent from 3.3 percent. The sector that includes trade, hotels, transport and communication saw growth falling to 6.5 percent from 8.3 percent.
The Reserve Bank of India is set to hold its next policy session on June 7 and economists widely expect the central bank to leave interest rates unchanged amid easing inflationary pressures.
Gross value added, a measure tracked by the RBI, grew 5.6 percent in the three months to March after 6.7 percent increase in the previous quarter, the CSO report showed.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.