India’s economy unexpectedly accelerated in the April-June quarter, as stronger government spending offset moderating industrial activity.

Official data Friday showed that India’s economy grew 7.8% from a year earlier, up from 7.4% in the prior quarter. That topped the 6.6% median forecast in a Wall Street Journal poll, in which all 12 economists had predicted a slowdown.

A Troubled Man, His Chatbot and a Murder-Suicide in Old Greenwich

Higher Prices Are Coming for Household Staples

A Guide to Shopping Online After De Minimis Tariff Rule Ends

Chinese Money Launderers Are Moving Billions Through U.S. Banks

U.S. Economy Grew Faster in Second Quarter, New Estimate Shows

Manufacturing activity edged higher, with growth at 7.7% versus 7.6% a year earlier. Construction slowed, while mining and quarrying contracted on year. Agriculture grew 3.7%.

Private consumption growth eased to 7.0% from 8.3%, while government spending returned to expansion, rising 7.4% on year.

Attention now turns to escalating trade tensions with the U.S.

Washington’s 50% tariff on Indian goods took effect Wednesday, combining an earlier 25% “reciprocal tariff” imposed in August with an additional 25% penalty targeting India’s purchases of Russian oil.

Analysts warn the higher rate could deal a bigger blow to than the initial 25% levy—while Friday’s growth data may suggest otherwise.

The Indian rupee hit an all-time low earlier on Friday, with USD/INR hitting 88.2960, LSEG data showed.

The Reserve Bank of India, which left policy rates unchanged in August after three straight cuts, has forecast 6.5% growth for the current fiscal year. Nomura economists recently lowered their GDP forecast, citing weaker exports and the spillover effect of tariffs on the labor market and investments.

“The RBI’s current growth forecast has not accounted for the 50% tariff,” they said in a note.

Although India’s direct exposure to the U.S. is relatively low, the 50% tariff rate is significantly higher than for peer economies and could erode India’s market share of exports by reducing its goods’ competitiveness, CareEdge said.

Write to Kimberley Kao at kimberley.kao@wsj.com

S&P 500, Dow Industrials Notch Records After GDP Revision

Even Nvidia Has Speed Limits

Dell Technologies Raises Full-Year Outlook, Third-Quarter View is Mixed

Caterpillar Says Higher Tariff Costs May Reach $1.8 Billion

Harmony Gold Mining Earnings Boosted by Higher Prices