The Indian economy expanded by a higher-than-anticipated 8.2%—a six-quarter high—as the slowdown in farm output was countered by greater industry production in expectation of a rise in consumption from the GST rate decrease.
A strong performance by the services sector, which had double-digit growth, also contributed to the rise in the second quarter, which was 5.6% in the same period last year and 7.8% in the three months prior. The fourth quarter (January–March) of the fiscal year 2023–2024 saw the previous high of 8.4%.
India's economy continued to develop at the highest rate in the world thanks to the expansion. The Chinese economy expanded by 4.8% in the July–September quarter.

According to figures published by the National Statistics Office (NSO), the GDP increased to 8% in the first half of 2025–2026 from 6.1% in the same period last year.
India may surpass the annual growth target of 6.3–6.8% for FY26, as predicted by the Economic Survey in January of this year, with an 8% growth rate in the first half.
The manufacturing sector saw a strong 9.1% rise during the quarter, up from 2.2% during the same period last year.
In order to satisfy the demand throughout the festival season, industries increased their output after Prime Minister Narendra Modi announced a reduction in the GST rate in his Independence Day speech.But compared to the same period last year, the growth of the agriculture sector slowed to 3.5% from 4.1%.
In response to the growth figures, Icra Chief Economist Aditi Nayar stated that, contrary to the general market expectation of some moderation, India's GDP growth greatly exceeded expectations, printing at a six-quarter high of 8.2% in Q2 FY2026 and showing an acceleration over the 7.8% growth seen in Q1 FY2026.
She stated that while the government's final consumption expenditure decreased as anticipated due to low revenue spending, the growth in gross capital formation slowed between these quarters. She added that differences were crucial in boosting GDP growth in Q2 FY2026 over the previous quarter.

The speed of growth from the strong 8% observed in H1 FY2026 may be slowed by an unfavorable base, the possible negative effects of US tariffs, and the Government of India's restricted headroom for capital spending (compared to the Budget Estimates). However, it currently seems that the real GDP growth in FY2026 would significantly surpass 7%, she pointed out.
Despite the series-low CPI inflation report for October 2025, she claimed that the likelihood of a rate cut in the December 2025 MPC review has undoubtedly decreased with the Q2 FY2026 GDP growth reaching 8%.
The Reserve Bank of India increased the GDP prediction for the current fiscal year from 6.5% to 6.8% earlier in October."Real GDP or GDP at Constant Prices in Q2 of FY 2025-26 is estimated at Rs 48.63 lakh crore against Rs 44.94 lakh crore in Q2 of FY 2024-25, registering a growth rate of 8.2 per cent," the National Statistics Office stated in its release.
Nominal GDP, also known as GDP at Current Prices, is projected to be Rs 85.25 lakh crore in Q2 of FY 2025–2026, up 8.7% from Rs 78.40 lakh crore in Q2 of FY 2024–2025.
The real GDP, or GDP at Constant Prices, for the first half of the current fiscal year is projected to be Rs 96.52 lakh crore, up 8% from Rs 89.35 lakh crore in the first half of 2024–2025.During the second quarter of this fiscal year, the discrepancies (differences in figures computed using multiple methodologies of GDP estimation) reached Rs 1.62 lakh crore.
According to Rumki Majumdar, an economist at Deloitte India, India's Q2 FY 2025 26 GDP growth was higher than anticipated at 8.2% year over year.
"With festive season spending and the momentum from GST 2.0 likely to support activity in Q3, we anticipate a significant upward revision to full-year growth estimates," she stated.
According to her, India's GDP deflator has dropped to its lowest level since 2019, which has slowed nominal GDP growth. This presents problems for important nominal GDP-related ratios like the fiscal deficit, debt, and current account.She voiced concern that the government would find it more difficult to reach its fiscal deficit targets, which are represented as a percentage of GDP.