The Indian economy grew at an annual pace of 5.3% in the three months to the end of September, down from 5.7% in the previous quarter, figures show.
Although the rate was slower than earlier in the year, it was still better than many analysts had expected.
The figures cover the first full quarter under the government of Prime Minister Narendra Modi.
Earlier, Indian stock market indexes hit new highs, in anticipation of the figures.
Investors were also encouraged by the news that the government is to cut its holdings in state-run banks, such as State Bank of India.