Q2 GDP growth grew 8.25%, fastest in 6 quarters

India’s economy delivered a strong performance in the July–September quarter, recording a six-quarter high GDP growth of 8.2%, far exceeding most projections, according to data released by the National Statistics Office (NSO) on Friday. The sharp rise was supported by low inflation, robust domestic demand, and higher government spending, helping the country outperform expectations even in the face of US-imposed tariffs.
The manufacturing sector expanded by an impressive 9.1% in Q2, a significant jump from the subdued 2.2% growth seen in the same period last year. The services sector also maintained strong momentum, growing 9.2%, led by a 10.2% rise in financial, real estate and professional services. However, agriculture and allied activities moderated to 3.5%, reflecting the sector’s slowdown.India’s economic resilience has been evident through the first half of the year, with GDP growth at 7.8% in Q1 and an average 8% growth for H1 FY26. The Q2 figure is notably higher than the Reserve Bank of India’s 7% estimate, and surpasses projections from other major institutions, which had placed the growth range between 7% and 7.5%.
Chief Economic Adviser V. Anantha Nageswaran said full-year growth is likely to exceed 7%, beating the Economic Survey’s 6.3–6.8% projection. He added that with current momentum, India is poised to cross the $4-trillion economic mark this financial year. “In the current uncertain global environment, the Indian economy stands out as an oasis of stability and growth,” he said.Prime Minister Narendra Modi called the numbers “very encouraging”, crediting the outcome to pro-growth reforms and the hard work of Indian citizens.
Nominal GDP for Q2 FY26 is estimated at Rs85.25 lakh crore, up from Rs78.40 lakh crore a year ago, marking 8.7% growth. Real GDP stood at Rs48.63 lakh crore, reflecting the 8.2% expansion. The gap between real and nominal GDP has sharply narrowed to 0.5 percentage points due to easing inflation pressures.Gross Value Added (GVA) also rose to a seven-quarter high of 8.1%, signalling broad-based sectoral strength. Analysts note the narrowing gap between GDP and GVA reflects improved alignment in economic activity and tax collections.However, the sharply lower GDP deflator, now at its lowest since 2019, has moderated nominal growth. Economist Rumki Majumdar of Deloitte India cautioned that this could strain fiscal indicators tied to nominal GDP, such as the fiscal deficit and debt ratios.Industry leaders welcomed the upbeat numbers. Mahindra Group CEO Anish Shah said the data highlights the resilience of India’s economy and the depth of domestic demand, noting that the manufacturing and services sectors have shown remarkable adaptability despite tariff headwinds. Vedanta Group chairman Anil Agarwal called India’s performance “amazingly resilient,” saying domestic demand and deregulation could propel growth to double digits.

(Business Correspondent)