Virendra Pandit

New Delhi: Beating all estimates, and despite multiple challenges from within and outside the country, India’s economy in the second quarter (July-September) of the current financial year 2025-26 (Q2FY26) grew a staggering 8.2 percent, as the South Asian powerhouse’s overall GDP is expected to cross the USD 4 trillion mark next year.

The Q2FY26 growth was well above the 7.8 percent growth reported in the previous quarter (Q1FY26), the media reported.

India’s economy continued its strong momentum in the July-September quarter (Q2FY26), with real gross domestic product (GDP) rising 8.2 percent, sharply higher than the 5.6 percent growth recorded in the same quarter last financial year, according to data released by the National Statistics Office (NSO) on Friday.

Real GDP for the quarter stood at Rs. 48.63 trillion, up from Rs. 44.94 trillion in Q2FY25. Nominal GDP rose 8.7 percent to Rs. 85.25 trillion during the quarter, compared with Rs. 78.40 trillion a year earlier, the media reported on Friday.

key drivers

Strong consumer spending and manufacturing remained key drivers amid global trade uncertainties.

The secondary and tertiary sectors boosted quarterly expansion. Manufacturing grew 9.1 percent while construction rose 7.2 percent. Amongst services, financial, real estate and professional services registered 10.2 percent growth, sustaining momentum in the broader tertiary segment, which expanded 9.2 percent in Q2FY26.

Agriculture and allied activities posted moderate growth of 3.5 percent, while electricity, gas, water supply and other utility services grew 4.4 percent.

Real Gross Value-Added (GVA) grew 8.1 percent to Rs. 44.77 trillion in Q2FY26, compared with Rs. 41.41 trillion a year earlier.

Beating RBI’s projection

The latest estimates are well above the Reserve Bank of India’s (RBI’s) projection of 7 percent growth in Q2FY26. During the last Monetary Policy Committee (MPC) meeting in October, RBI Governor Sanjay Malhotra noted that India registered strong growth during the first quarter at 7.8 percent, and announced that the bank has increased the overall growth forecast for FY26 to 6.8 percent from the earlier 6.5 percent.

However, economists expected a higher growth than the RBI’s projections. India’s economy likely grew 7.3 percent in the July-September quarter, underpinned by strong rural and government expenditure even as private capital spending remained subdued.

India remains one of the world’s fastest-growing major economies even as it bears the brunt of US President Donald Trump raising tariffs on Indian goods to 50 percent, starting August 27. Due to the steep tariffs, foreign investors have pulled out a net USD 16 billion from Indian equities so far this year.

Highlights

– Real GDP has been estimated to grow by 8.2 percent in Q2FY26 against the growth rate of 5.6 percent during Q2FY25.

– Nominal GDP has witnessed a growth rate of 8.7 percent in Q2FY26.

– The Secondary (8.1 percent) and Tertiary Sector (9.2 percent) has boosted the Real GDP growth rate in Q2FY26 to rise above 8 percent.

– Manufacturing (9.1 percent) and Construction (7.2 percent) in the Secondary Sector, has registered above 7 percent growth rate at Constant Prices in this quarter.

– Financial, Real Estate & Professional Services (10.2 percent) in the Tertiary Sector has sustained a substantial growth rate at Constant Prices in Q2 of FY 2025-26.

– Agriculture and Allied (3.5 percent) and Electricity, Gas, Water Supply and Other Utility Services Sector (4.4 percent) has seen moderated Real growth rate during Q2 of FY 2025-26.