India posts strong 8.2% GDP growth in Q2, fastest pace in six quarters

Manufacturing, construction and a powerful services push lift India’s economic momentum despite global pressures and tariff headwinds.

India’s economic growth gathered significant pace in the July-September period, with official estimates showing real GDP expanding 8.2% in the second quarter of FY 2025-26. The latest data from the National Statistics Office (NSO) places quarterly growth well above the 5.6% registered a year ago and stronger than the 7.8% recorded in the previous quarter. This marks the highest growth rate in six quarters, exceeding most market expectations despite external pressure from recent US tariff measures.

The country’s GDP at constant prices rose to ₹48.63 lakh crore, compared with ₹44.94 lakh crore in the corresponding period last year. At current prices, nominal GDP increased 8.7% to ₹85.25 lakh crore, reflecting sustained economic activity across key segments.

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A large part of the momentum stemmed from a broad-based revival in industrial and services sectors. Manufacturing expanded 9.1%, supported by improved factory output and strong order flows. Construction activity grew 7.2%, contributing to an overall 8.1% rise in the secondary sector.

The services economy remained the strongest pillar of growth. The tertiary sector reported 9.2% expansion, with financial, real estate and professional services jumping 10.2%, highlighting continued resilience in business activity and urban demand.

Household consumption also showed solid progress. Real private final consumption expenditure grew 7.9%, compared to 6.4% a year earlier, signalling that consumer demand held up despite uneven monsoon conditions.

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However, agriculture lost some pace. The farm sector recorded 3.5% growth, reflecting weather-related challenges and slower output in certain segments. Utilities, covering electricity, gas and water supply, grew 4.4%, indicating moderate movement in these essential services.

Across the first half of FY26, real GDP growth has averaged 8%, up from 6.1% during the same period last year. Real GVA growth for Q2 stood at 8.1%, supported by widespread expansion in core industries and services.

The stronger-than-estimated performance reaffirms India’s position as the world’s fastest-growing major economy and sets an optimistic tone for the second half of the financial year. Policymakers will now monitor inflation trends, domestic consumption behaviour and global demand conditions as they shape the outlook for the months ahead.