GDP growth surges to 6-quarter high of 8.2%, defies projections

The Indian economy continued to expand, reaching a six-quarter high growth of 8.2 per cent in Quarter 2 of financial year 2025-26, up from 5.6 per cent growth rate for the corresponding quarter of FY 2024-25 and from 7.8 per cent growth in the first quarter of FY 2025-26.

The growth, which defied projections, was powered by the services and manufacturing sectors, which emerged key drivers of the economy, clocking 9.2 per cent and 9.1 per cent growth rate, respectively.

Lower inflation at the producer and consumer level in Q2 of FY 2025-26 also created a conducive growth environment. Chief Economic Adviser V Anantha Nageswaran said going by the current trends, the Indian economy would cross the $4 trillion mark in the current fiscal.

Prime Minister Narendra Modi said the GDP growth was a measure of the government’s pro-growth policies.

“The 8.2 per cent GDP growth in Q2 of 2025-26 is very encouraging. It reflects the impact of our pro-growth policies and reforms. It also reflects the hard work and enterprise of our people. Our government will continue to advance reforms and strengthen ease of living for every citizen,” the PM said after the Ministry of Statistics and Programme Implementation put out the figures.

“Real GDP or the GDP at constant prices in Q2 of FY 2025-26 is estimated at Rs 48.63 lakh crore against Rs 44.94 lakh crore in Q2 of FY 2024-25, registering a growth rate of 8.2 per cent. Nominal GDP or the GDP at current prices in Q2 FY 2025-26 is estimated at Rs 85.25 lakh crore against Rs 78.40 lakh crore in Q2 of FY 2024-25, registering a growth rate of 8.7 per cent,” the National Statistics Office said.

Broadly, the secondary sector with a growth rate of 8.1 per cent and the tertiary sector with 9.2 per cent growth rate boosted the real GDP growth rate in Q2 of FY 2025-26 beyond 8 per cent.

Manufacturing (9.1 per cent) and construction (7.2 per cent) in the secondary sector, registered above 7 per cent growth rate at constant prices in this quarter.

Financial, real estate and professional services (10.2 per cent) in the tertiary sector have sustained a substantial growth rate at constant prices in Q2 of FY 2025-26.

Agriculture and allied (3.5 per cent) and electricity, gas, water supply and other utility services sector (4.4 per cent) has seen a moderate real growth rate during Q2 of FY 2025-26.

Real Private Final Consumption Expenditure (PFCE) reported 7.9 per cent growth rate during Q2 of FY 2025-26 as compared to the 6.4 per cent growth rate in the corresponding period of previous financial year.

The government said industries like steel, cement, garments, automobiles and tyres showed significant growth and policies such as repo rate revision and GST rationalisation played a favourable role in expanding the economy.

The CEA said rural demand remained resilient with tractor sales in October 2025 reaching the highest level for any month in the past 11 years.

“Rural consumption continued to strengthen, driven by favourable agricultural incomes on the back of healthy crop output. In October 2025, the tractor sales reached the highest level for any month in the past 11 years, supported by favourable monsoon conditions, improved rural sentiment, festive demand and the recent GST rate reduction. Retail sales of two and three-wheeler vehicles recorded the highest growth in October,” the CEA said.

India to lead with 7% GDP in 2025: Moody’s

Moody’s Ratings on Friday said India would lead growth among emerging markets and across the Asia Pacific region with a 7% GDP expansion in 2025 and 6.4% the next year. Moody’s also said India’s domestic growth drivers underpinned its economic resilience amid global uncertainty. It projected average GDP growth in APAC (Asia-Pacific) at steady 3.4% in 2026 compared to 3.3% in 2024 and expected growth of 3.6% in 2025.

The government further attributed the positive outlook to increased net household savings in FY 2025-26.

“Household financial liabilities decreased from 5.9 per cent of the GDP in FY23 to 4.7 per cent in FY25, driving this improvement,” a government statement said with the CEA noting that the growth momentum was firming, driven by robust expansion in the manufacturing and services sectors and supported by festive demand and the GST rate cut-led gains.

Congress general secretary Jairam Ramesh, however, questioned the growth numbers.

“It is ironic that the quarterly GDP numbers have been released soon after an IMF report gave the second-lowest grade of C to India’s national accounts statistics in its annual assessment of the Indian economy. The numbers continue to be disappointing. There has been no upswing in gross fixed capital formation. High GDP growth rates are simply not sustainable in the absence of any renewed momentum in private investment. That is clearly not in evidence. The unrealistically low GDP deflator — which implies an inflation rate of only 0.5 per cent — is at complete variance with the experiences of crores of households burdened by crushing price rise in their items of daily consumption,” Ramesh said.

The industry, however, welcomed the GDP data.

Rajeev Juneja, President of the PHD Chamber of Commerce and Industry, said the trend pointed towards India’s steady and robust development, boosted by structural policy reforms by the government.