India’s gross domestic product expanded by a robust 8.2 percent in the July to September quarter of fiscal year 2025 to 26. This is a significant jump from the 5.6 percent growth recorded in the same quarter last year and marks the fastest expansion in six quarters. The latest estimate has surprised most market forecasts which were in the range of 7 to 8 percent.
Strong Sectoral Momentum
The growth was powered by a broad based revival across manufacturing, industry and services. Manufacturing recorded a strong upswing supported by improved capacity utilisation and resilient domestic demand. Services continued to display solid momentum reflecting rising consumption and a pick up in transport, trade and financial services. Consumer spending, particularly private consumption, remained a key pillar of the recovery as both urban and rural demand strengthened during the quarter.
Economists note that the strong print came even before the full effect of recent tax rationalisation under the goods and services tax is visible. The data indicates that domestic economic momentum had already gathered pace in early FY26.
Global Positioning and Forecasts
The latest performance cements India’s position as one of the fastest growing major economies in the world. Many analysts had earlier predicted growth in the 7 to 7.5 percent range, pointing to improving rural sentiment, steady urban spending and supportive government expenditure. The actual outcome has exceeded these expectations and added to optimism for the second half of the fiscal year.
International institutions also remain upbeat. The International Monetary Fund recently remarked that India’s economy is set to remain resilient due to strong fundamentals and well contained inflation. Several private forecasters, including Moody’s, expect India to average around 7 percent growth in 2025, placing it ahead of other emerging markets.
What Lies Ahead
The sharp expansion in Q2 signals that the economy has entered the second half of FY26 with firm momentum. The combination of manufacturing revival, buoyant services activity and broad based consumption provides a favourable setup for sustained growth.
However, experts caution that global uncertainties, weak external demand and geopolitical tensions could create risks in the coming quarters. Domestic investment revival and continued macroeconomic stability will therefore be crucial to maintaining the current pace.
India’s 8.2 percent GDP growth in Q2 FY26 is a strong affirmation of the country’s economic resilience. With manufacturing and services gaining strength and consumption remaining steady, the economy has showcased its ability to grow despite global challenges. The coming months will determine how effectively this momentum can be sustained as policy reforms and easing tax regimes gradually take effect.
