The Indian economy grew much faster than expected during the third quarter, bolstered by manufacturing and government spending, fuelling expectations it may outperform its own full-year estimates.

Asia's third-largest economy grew 7.6% in Q3, surpassing the Reserve Bank of India's 6.5% forecast as well as the 6.8% prediction in a Reuters poll of economists.

India remains one of the fastest-growing major economies, yet the pace of growth was marginally slower than the 7.8% growth in India in Q2, aided by the comparison with a lower base the year before.

The country's manufacturing sector grew 13.9% year-on-year between July and September, compared to a revised 4.7% during the previous quarter.

"The buoyant growth is being underpinned by cyclical factors like robust corporate profits, a strong fiscal impulse ... and a boisterous financial sector," according to Emkay Global economist Madhavi Arora.

Government spending increased 12.4% year-on-year in Q3, compared to a 0.7% contraction in Q2.

In addition, growth in capital formation ticked up to 11% year-on-year from 8% in the previous quarter.

That said, private consumption growth decelerated to 3.1% year-on-year from 6%, Reuters reports.

"The data doesn't look that good on the consumption side... This is largely due to a weakness in rural demand and it is being reinforced by the low growth in the agricultural sector," stated Suman Chowdhury at Acuite Ratings & Research.

India is forecast to exceed the government's growth forecast of 6.5% for the fiscal year, according to some economists and policymakers, despite a possible degree of moderation in the next two quarters as tight monetary policy conditions affect demand.

"With a strong first half, full-year growth rates might be subject to an upward revision of 40-50 basis points compared to our present estimate," said DBS Bank economist, Radhika Rao.

According to the latest print, in the first half of the fiscal year between April and September, India's growth averaged 7.7%.