India’s economy delivered an unexpectedly strong performance in the July–September quarter of the current financial year (2025–26), recording growth that defied the Reserve Bank of India’s projections and surpassed the estimates of major rating agencies. According to the latest report released by the Union Ministry of Statistics, GDP expanded by 8.2 per cent in the second quarter, its fastest pace in six quarters. This marks a significant rise from 5.6 per cent in the same period last year and an improvement over the 7.8 per cent recorded in April–June, the first quarter of the year.
The robust GDP outcome also indicates that the 50 per cent import duty imposed on Indian goods by US President Donald Trump has not exerted the adverse impact many had feared. At the same time, the numbers suggest that the recent GST reform, implemented on September 22, has begun to yield positive results. Economists believe that the full benefits of the GST rate cut are yet to materialise, making the strong showing in this quarter even more noteworthy. The latest figure has surpassed all major forecasts: the Reserve Bank of India had predicted 7 per cent, Reuters 7.3 per cent, ICRA 7 per cent, and India Ratings 7.2 per cent. With this performance, India has once again retained its position as the fastest-growing major economy in the world. China’s GDP growth currently stands at 4.8 per cent, while the US has not yet released its official figures, though estimates place American growth at around 4 per cent. In contrast, several advanced economies have shown stagnation or contraction: Japan registered a negative growth rate of 0.4 per cent, Germany recorded zero growth, and the UK reported a marginal 0.1 per cent expansion.
The Ministry of Statistics also released data for the previous six quarters, showing a clear upward trend culminating in the latest quarter’s impressive numbers. Growth stood at 6.5 per cent in April–June 2024–25, 5.6 per cent in July–September, 6.4 per cent in October–December, and 7.4 per cent in January–March. In the current financial year, the economy posted 7.8 per cent growth in April–June, followed by the latest 8.2 per cent in July–September, the highest of all these periods. A major driver of this surge has been the remarkable recovery of the manufacturing sector, one of the core pillars of the Indian economy. Manufacturing growth soared to 9.1 per cent in the July–September quarter, up sharply from 2.2 per cent in the same period last year. This resurgence reflects improved industrial output, stronger domestic demand, and stabilising supply chains. The agriculture sector, however, witnessed a mild slowdown, with growth easing from 4.1 per cent last year to 3.5 per cent this quarter. The mining sector showed a modest improvement, reducing its contraction from –0.4 per cent to –0.04 per cent, signalling near-stabilisation after several subdued quarters. Construction, another key contributor to employment and infrastructure expansion, posted slower growth at 7.2 per cent, down from 8.4 per cent last year.
The utilities sector, which includes electricity, gas, and water supply, exhibited stronger performance, rising from 3 per cent to 4.4 per cent. Sectors related to trade, hotels, transport, communication, and broadcasting collectively registered an improved growth rate of 7.4 per cent, compared to 6.1 per cent in the previous year. One of the standout performers in this quarter was the sector comprising finance, real estate, and professional services, which expanded at a striking 10.2 per cent, up from 7.2 per cent in the same quarter last year. Public administration, defence, and related services also saw accelerated activity, with the growth rate increasing from 8.9 per cent to 9.7 per cent, reflecting higher government spending and administrative expansion.
In absolute terms, India’s GDP in the July–September quarter reached Rs 48.63 lakh crore, rising from Rs 44.94 lakh crore in the corresponding quarter of the previous year, an increase of 8.2 per cent in value terms. GDP represents the total value of goods and services produced within a country over a defined period and is a key indicator of economic health. With both the first and second quarters of 2025–26 posting higher-than-expected growth of 7.8 per cent and 8.2 per cent, respectively, economists believe India is well-positioned to achieve overall GDP growth exceeding 7 per cent for the full financial year.
