India's Economy Surges with 8.2% GDP Growth in Q2 FY26, Exceeding Forecasts

Robust Economic Expansion in Q2 FY26

India's economy demonstrated remarkable resilience and growth in the second quarter of the current financial year 2025-26, with its real Gross Domestic Product (GDP) expanding by a substantial 8.2%. This figure, covering the July-September 2025 period, represents a six-quarter high and significantly outpaced most economists' forecasts, which generally hovered around 7.2% to 7.4%. The National Statistical Office (NSO) released the data, highlighting a continued upward trajectory for the Indian economy.

The latest growth rate also marks the fourth consecutive quarter of acceleration, reinforcing India's position as one of the fastest-growing major economies globally. In comparison, India's GDP grew by 7.8% in the preceding April-June quarter (Q1 FY26) and 5.6% in the same quarter of the previous fiscal year (Q2 FY25).

Key Drivers of Growth

The impressive growth was broad-based, with several sectors contributing significantly to the economic uplift.

• Manufacturing: The sector recorded a strong expansion of 9.1%, its fastest growth in six quarters, driven by higher industrial output and improved capacity utilization.
• Services: The tertiary sector continued its dominance, expanding by over 9% for the second consecutive quarter. Financial, real estate, and professional services notably grew by 10.2%, while public administration, defense, and other services saw a 9.7% increase.
• Construction: This sector also showed robust performance, growing by 7.2%.

Private consumption, a crucial component accounting for approximately 57% of GDP, strengthened, growing by 7.9%, up from 7.0% in Q1 FY26. Government spending, particularly capital expenditure, and front-loaded exports also played a role in boosting the overall activity.

Official Reactions and Economic Outlook

Prime Minister Narendra Modi lauded the Q2 FY26 GDP growth as 'very encouraging,' stating that it 'reflects the impact of our pro-growth policies and reforms' and the 'hard work and enterprise of our people.' Chief Economic Advisor V Anantha Nageswaran indicated that the GDP growth for the entire fiscal year 2025-26 is now expected to be at least 7%, an upward revision from previous forecasts of 6.3-6.8%.

Economists have largely reacted positively to the data, with many describing the growth as 'blockbuster.' Dharmakirti Joshi, Chief Economist at Crisil, noted that private consumption was a primary driver, complemented by manufacturing and services. Aditi Nayar, Chief Economist at ICRA, highlighted that the strong Q2 growth print reduces the probability of an immediate rate cut by the Reserve Bank of India (RBI), despite benign inflation. The RBI had projected a 7% growth rate for Q2 FY26, and the actual outcome may lead the central bank to revise its projections upwards.