India’s GDP Surges to 8.2%, Fastest Among Major Economies

New Delhi: Exceeding expectations, India’s economy quickened as the gross domestic product (GDP) rose to a six-quarter high of 8.2 per cent in the second quarter of this financial year (FY26), up from 5.6 per cent in the same quarter last year. However, India remains the world’s fastest growing major economy as the quarter’s expansion is underpinned by strong rural and government expenditure as well as a consumption boost from the recent GST rate cut.

Soon after the GDP data release, Prime Minister Narendra Modi hailed the figure, saying 8.2 per cent GDP growth in Q2 of 2025-26 was 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,” Modi said in a post on X.

Union finance minister Nirmala Sitharaman on Friday said the September quarter GDP of 8.2 per cent shows that reforms and fiscal consolidation drove the Indian economy’s robust growth and momentum. “Various high-frequency indicators also point to continued economic momentum and broad-based consumption growth,” she said.

Despite the global headwinds and international trade policy uncertainty, the real GDP growth number beat all economists’ expectations by a wide margin with a six-quarter high. Even the Reserve Bank had projected a second-quarter GDP growth of 7 per cent in its last monetary policy review. In the second quarter data, the GDP boost, however, shrugged off the hefty 50 per cent US tariffs on Indian exports imposed by US President Donald Trump. Besides, the IMF has also projected a full year GDP growth of 6.6 per cent.

The expansion of the economy, however, helped India retain its position as the world’s fastest-growing major economy. During the July-September quarter, the Chinese economy grew by only 4.8 per cent. In the last Economic Survey tabled in Parliament in January, it had projected real economic growth of 6.3-6.8 per cent for FY26.

Briefing the media after the release of the Q2 GDP data, the government’s top economist and chief economic adviser (CEA) V. Anantha Nageswaran said the Indian economy is expected to cross $4 trillion in the current fiscal year, given the current rate of growth. “Going by the growth numbers, India’s GDP growth continues to outpace major economies, indicating relative stability and that the Indian economy will cross the $4 trillion mark in the current fiscal,” Nageswaran said.

Analysing the current growth numbers, the CEA also said that the third quarter (October-December) of the current fiscal had begun on a sound footing. “Stable inflation, sustained public capex and reform momentum position the economy will navigate the risks in the next quarters. Besides, agricultural production in 2024-25 also indicates a record output of foodgrains and electricity consumption is something we should watch out for. Besides, the share of exports in GDP is the highest in the last eight quarters, and overall we can see the picture of steady growth in the third quarter, and full year growth will be seven per cent or more than seven per cent,” the CEA said.

With an eight per cent growth rate in the first half, India may exceed the annual growth target of 6.3-6.8 per cent for FY26 as projected in the Economic Survey in January this year. “During the quarter, the manufacturing sector recorded a robust growth of 9.1 per cent, compared to 2.2 per cent in the year-ago period,” the data showed.

Following the GST rate cut announcement by Prime Minister Narendra Modi in his Independence Day address, factories stepped up their output to meet the festival season demand. The GST rate cut came into effect on September 22. “The performance of the services sector, including banking and real estate, also witnessed an impressive growth of 10.2 per cent from 7.2 per cent in the same period a year ago,” the data said, adding that agriculture sector growth, however, decelerated to 3.5 per cent from 4.1 per cent in the year-ago period.