India’s economy expanded by a strong 8.2% in the July–September quarter of FY 2025-26, surpassing market expectations and improving on the 7.8% growth recorded in Q1.
The latest figure also marks a sharp rise from 5.4% in the same quarter last fiscal, driven by solid private consumption and a strong manufacturing rebound. Forecasts from Reuters (7.3%), SBI Research (7.5%) and Bloomberg (7.4%) were all outpaced by the official GDP print.
Key growth drivers
| Indicator | Q2 FY26 | Q1 FY26 | Trend |
|---|---|---|---|
| Private consumption growth | 7.9% | 7.0% | Higher |
| Manufacturing output | 9.1% | 7.7% | Higher |
| Construction activity | 7.2% | 7.6% | Slightly lower |
| Government spending | -2.7% | +7.4% | Lower |
Economic Context
India’s better-than-expected growth comes despite external challenges, including US tariffs on Indian exports. Strong domestic demand, resilient factory activity and steady expansion in services supported the overall momentum.
Meanwhile, inflation dropped to a historic low of 0.25% in October 2025, fuelling expectations that the Reserve Bank of India may consider a rate cut in its December monetary policy review.
The Q2 numbers reaffirm India’s position as one of the fastest-growing major economies globally.
