NEW DELHI—India’s gross-domestic-product expansion dipped below 6% last quarter, forcing the country to surrender its title as the world’s fastest-growing large economy as citizens and companies held back on spending.

The GDP of Asia’s third-largest economy climbed 5.8% in the three months through March, putting it behind China’s 6.4% growth for the same period. India still grew more than China for the full calendar year last year and is expected to outpace China eventually this year as well.

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