BS EDIT: India’s GDP outperforms, but nominal growth raises concerns

Strong first-half growth

India’s GDP grew 8% in H1 FY26, with Q2 at 8.2%. Manufacturing, construction and services drove the surge, beating the RBI’s 7% forecast

Demand remains steady

Private consumption rose 7.9%, reflecting stronger household spending. Investment grew 7.3%, slightly lower than Q1 but still healthy

Global pressures persist

Growth held up despite global uncertainty. A 50% US tariff on India adds pressure and is expected to soften economic momentum in H2

Policy support ahead

GST rate cuts may lift Q3 numbers. A possible India–US trade deal and talks on a bilateral investment treaty could strengthen investment

Nominal growth slows

Nominal GDP grew only 8.8% in H1. Low inflation narrowed the gap with real growth, raising concerns for tax revenue and corporate earnings

Fiscal and policy impact

Weak nominal growth may affect debt-to-GDP targets. With growth strong and inflation a concern, an MPC rate cut appears unlikely