India's Q2 FY26 GDP grows 8.2% as spending and key sectors strengthen

India’s economy continued its strong momentum in the July-September quarter (Q2) of FY 2025-26, with real gross domestic product (GDP) rising 8.2 per cent, sharply higher than the 5.6 per cent 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 ₹48.63 trillion, up from ₹44.94 trillion in Q2 FY25. Nominal GDP rose 8.7 per cent to ₹85.25 trillion during the quarter, compared with ₹78.40 trillion a year earlier .

Sectoral performance boosts growth

The secondary and tertiary sectors remained key drivers of the quarterly expansion. Manufacturing grew 9.1 per cent, while construction rose 7.2 per cent. Within services, financial, real estate and professional services registered 10.2 per cent growth, sustaining momentum in the broader tertiary segment, which expanded 9.2 per cent in Q2 FY26 .

 

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

 

Real GVA grew 8.1 per cent to ₹44.77 trillion  in Q2 FY26, compared with ₹41.41 trillion a year earlier.

Q2 GDP beats RBI projection

The latest estimates are well above the Reserve Bank of India’s (RBI’s) projection of 7 per cent for Q2 FY26. Noting that India registered strong growth during the first quarter at 7.8 per cent, RBI Governor Sanjay Malhotra announced that the bank has increased the overall growth forecast for FY26 to 6.8 per cent from the earlier 6.5 per cent during the last monetary policy committee (MPC) meeting in October.

 

However, the economists were expecting a higher growth than the RBI's projections. According to a Reuters poll released earlier this month, India's economy likely grew 7.3 per cent 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 per cent starting August 27. Due to the steep tariffs, foreign investors have pulled out a net $16 billion from Indian equities so far this year, Reuters reported.