The growth rate was much faster than economists' forecasts of 6.6% as seen in a Reuters poll, and higher than the revised growth of 8.1% in the previous quarter.

The manufacturing sector, which for the past decade has accounted for just 17% of Asia's third-largest economy, expanded 11.6% year-on-year in the December quarter, compared with a revised 14.4% in the previous three months.

The farm sector, which accounts for about 15% of the $3.7 trillion economy, contracted 0.8%, compared with 1.6% growth in the September quarter.

COMMENTARY

THAMASHI DE SILVA, ASSISTANT INDIA ECONOMIST, CAPITAL ECONOMICS, LONDON

Looking ahead, we expect economic activity to moderate over the coming quarters but it should still remain exceptionally strong, which will limit the need for policy loosening for a while.

The timelier activity data such as the flash PMI (purchasing managers' index) suggest that the economy has made a flying start to 2024 too. We think that momentum may fade a touch; household consumption is likely to moderate as a result of the tightening of restrictions on unsecured lending and the lacklustre global backdrop is likely to weigh further on exports.

That said, any slowdown in growth will be mild, particularly as the government's infrastructure drive is likely to prop up activity. This limits any immediate need for rate cuts. We think the Reserve Bank of India will only start easing policy in Q3 2024, much later than most other major emerging markets.

UPASNA BHARDWAJ, CHIEF ECONOMIST KOTAK MAHINDRA BANK, MUMBAI

The sharp upward revision to the GDP comes on the backdrop of downward revision to FY23 figures and stronger investment and net exports in FY24, but lagging consumption.

More intriguing is that gross value-added estimates for FY24 have been left unchanged, while GDP is sharply higher.

RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE

The real GDP posted a strong upside surprise at 8.4%, signalling that India continues to grow at a faster pace than regional and major economies, taking the fiscal year-to-date average for FY24 to above 8%.

Investment growth is on the driver's seat as a supply-driven push also helps the economy witness a non-inflationary recovery, while consumption grew at a moderate pace.

Risks to the outlook are mainly exogenous, with an unexpected worsening in the geopolitical situation as well as volatile commodity movements.

The robust growth report will likely reinforce the central bank's optimism on the outlook, reinforcing their preference to keep policy conditions tight.

(Reporting by Navamya Ganesh Acharya, Kashish Tandon and Dimpal Gulwani in Bengaluru; Editing by Sohini Goswami)