The Indian economy grew 7.7 per cent year-on-year in January-March.The figure surpassed China’s growth rate of 6.8 per cent in the January-March quarter, confirming India as the fastest growing major economy.

India also reported 4.7 per cent growth in annual infrastructure output in April, signaling a recovery after it slipped to a three-year low of 4.2 per cent in 2017-18. Construction activity jumped to 11.5 per cent during January-March after a 3.9 per cent drop in the year-ago period.

The faster pace of growth in the latest quarter might also strengthen expectations of an interest rate increase.

India’s recovery could be threatened by higher global crude oil prices. India meets 80 per cent of its oil needs from imports. Higher oil prices have already pressured the rupee.

Alongside, rising global trade tensions due to the imposition of import tariffs by the United States could moderate global trade growth, tempering Indian exports.

However, growth is likely to get a boost from monsoon rains, potentially brightening the outlook for agricultural output. Monsoons deliver about 70 per cent of India’s annual rainfall and are the lifeblood of its economy, spurring farm output and boosting rural spending.

Economic growth could reach 7.4 per cent in 2018-19.