India’s Q2 GDP surges 8.2%; full year growth to stay above 7%, says CEA

The Indian economy grew by 8.2% in the second July-September quarter (Q2) of fiscal year 2025-26, sharply higher than the 5.6% expansion recorded in the previous year, according to data released by the National Statistical Office (NSO) on Friday. The strong performance, supported by manufacturing, construction and services, prompted Chief Economic Advisor (CEA) Dr V Anantha Nageswaran to expect full-year growth to “comfortably” stand at 7% or higher.

The CEA described the latest publication as “exceeding even the most optimistic estimates,” and said the second-quarter result reflects “the cumulative policy efforts put in place since the return of government in June 2024.” Real GDP for the quarter was Rs 48.63 lakh crore, while nominal GDP rose 8.7% to Rs 85.25 lakh crore.

Growth was supported by broad-based improvement in key sectors. The secondary sector expanded by 8.1%, driven by growth of 9.1% in manufacturing and 7.2% in construction. The tertiary sector grew by 9.2%, with financial, real estate and professional services rising by 10.2%. Private consumption also remained stable, with real final consumer spending rising by 7.9%, compared to 6.4% last year.

With the first half (April-September) of FY26 recording 8% growth in GDP, Nageswaran said the economy has shown resilience despite global volatility. “Now we can comfortably say that growth for the full year will be either 7% or to the north 7% instead of 7% to the south,” he said during a press conference following the statement.

However, the external environment remains difficult. Merchandise exports contracted by 11.8%, reflecting the impact of higher tariffs imposed by the United States on Indian goods. “Despite the great efforts of exporters to find other markets, there is still a residual negative impact,” Nageswaran said. Non-oil exports and gems and jewelery performed slightly better, but also remained weak.

However, he emphasized that the economy “came through an eventful year very well.” He added that previous fears that US tariffs could push FY26 growth to nearly 6% have now subsided. “We’re sitting here on November 28, looking at 8% growth in the first half, and now we’re talking about 7% growth or higher.”

The economic trajectory is supported by macroeconomic stability and financial prudence, factors that contributed to three credit rating upgrades this year from S&P, R&I (Japan) and DBRS (US), the CEA said.