India’s GDP recorded a six-quarter high growth of 8.2% in Q2 (July–September), as factories churned out more products in anticipation of a consumption boost from the GST rate cut. Here are the 5 key takeaways from the government release.
The GDP growth in the second quarter was higher than 7.8% in Q1 (April–June) and 5.6% in the year-ago period (Q2 FY25). The Q2 GDP data also surpassed analysts’ estimates of 7–7.5%. Nominal GDP grew at an 8.7% rate.
1. Manufacturing and services lead
Manufacturing, which makes up 14% of the country’s Gross Domestic Product, rose 9.1% in Q2, up from 2.2% in the same quarter last financial year. Construction expanded 7.2% year-on-year (YoY), compared with 7.6% a quarter ago.
In services, financial, real estate and professional services registered the biggest jump at 10.2%.
2.Consumption picks up
Private consumer spending, which accounts for around 57% of GDP, rose 7.9% year-on-year in July–September, compared with a 7.0% increase a quarter ago. The increase indicates stronger consumer spending and improved confidence.
The government has announced GST rationalisation to boost consumption and subdue the Steep 50% US tariff on India. The GST new rates took effect from September 22, the analyst expect the impact to be visible in the FY26 growth data.
3. Agriculture remains soft
Agriculture and allied activities grew 3.5%—well below other sectors. The utilities category, which includes electricity, gas, water supply and other services, grew 4.4%.
4. First half paints a strong picture
For the first half of FY 2025–26, GDP grew 8.0%, against 6.1% in the same period last year. Nominal GDP for the half-year is estimated at Rs 171.30 lakh crore, up from Rs 157.48 lakh crore. Real GVA has risen 7.9% to Rs 89.41 lakh crore.
Govt sees strong demand and public capex sustaining growth in H2 FY26
The government also expects strong demand, firm public spending, and easing inflation to help India weather trade uncertainties and sustain growth through the rest of 2025/26. In its monthly economic report for the month of October, finance ministry said, “the economy enters the second half of FY26 on a stable footing, anchored by well-contained inflation, resilient domestic demand and supportive policy dynamics, even as global uncertainties warrant continued vigilance.”
The Reserve Bank of India (RBI) expects 6.8% growth this fiscal year.