India’s economy gathered even more momentum in the July–September quarter, with official estimates showing real GDP rising 8.2% in Q2 of FY 2025–26. This is not only higher than the 5.6% growth seen in the same quarter last year, but also an improvement over the 7.8% recorded in Q1 — marking the strongest pace of expansion in a year and a half. The outcome exceeded most projections, despite headwinds from US trade tariffs.

According to figures released by the National Statistics Office (NSO), the uptick was fuelled by solid manufacturing activity, a sturdy construction sector, and continued strength in services.

At constant prices, GDP reached ₹48.63 lakh crore during the second quarter, compared to ₹44.94 lakh crore a year earlier. In nominal terms, the economy grew 8.7% to ₹85.25 lakh crore.

Prime Minister Narendra Modi hailed the data as “very encouraging,” crediting India’s progress to the efforts of its citizens and the government’s reform push.

“Q2’s 8.2% GDP growth is extremely heartening. It highlights the results of our development-oriented reforms and the dedication of our people. We will keep driving reforms that enhance ease of living for every Indian,” he wrote.

Much of the boost came from the industrial and services space. Manufacturing output expanded 9.1%, construction rose 7.2%, and the broader industrial sector posted an 8.1% rise.

Services continued to be the star performer, with the tertiary sector growing 9.2%. This was led by a strong 10.2% jump in financial, real estate, and professional services.

Household spending also picked up pace. Real private final consumption expenditure (PFCE) rose 7.9% in Q2, compared to 6.4% in the same period last year, suggesting resilient demand in spite of patchy rainfall.

Agriculture, however, remained subdued. The farm sector expanded only 3.5%, and utilities — including electricity, gas, and water supply — grew 4.4%, pointing to a slower patch for these areas.

Overall, the first half of FY26 has delivered an 8% GDP growth rate, sharply higher than the 6.1% recorded in the first half of the previous year. Real GVA rose 8.1% in Q2, supported by widespread gains across major sectors.

The stronger-than-anticipated numbers reaffirm India’s position as the fastest-growing major economy worldwide and set a positive tone for the remainder of the fiscal year. Policymakers will now turn their attention to inflation trends, domestic consumption, and global economic uncertainties as they gauge the outlook ahead.