Datanomics: Rupee drag may delay India overtaking Japan's economy

India posted strong 8.2% real GDP growth in Q2 FY26, but rupee depreciation trimmed its dollar GDP, keeping Japan narrowly ahead in the April-September comparison

India’s real gross domestic product (GDP) growth jumped to a six-quarter high of 8.2 per cent in the second quarter of 2025-26 (Q2FY26). Nominal GDP growth eased to 8.7 per cent from 8.8 per cent in Q1, signalling that lower inflation is lifting numbers. India is expected to overtake Japan as the fourth-largest economy in 2025; however, at least during April-September, India could not do so because of exchange-rate movements.

 

India still fastest-growing major economy

 

India’s real GDP growth increased to 8.2 per cent in Q2 from 7.8 per cent in Q1, staying well ahead of