India's economic landscape is beaming with positive energy as the second quarter of fiscal year 2026 (July-September 2025) witnesses a sizzling GDP growth rate of 8.2%. This impressive figure marks the fastest pace of expansion in the last six quarters, exceeding expectations and underscoring the resilience of the Indian economy.

The robust growth is attributed to a confluence of factors, primarily a strong rebound in the manufacturing sector and heightened activity in the services sector. Strong domestic demand, spurred by the festive season, further fueled factories to ramp up production. This has enabled India to maintain its position as the fastest-growing major economy, effectively weathering the impact of recently imposed US tariffs.

The National Statistical Office (NSO) data reveals a significant acceleration compared to the 7.8% growth in the previous quarter (April-June 2025) and the 5.4% growth in the corresponding quarter of the previous year. This unexpected surge marks the fourth consecutive quarter of rising growth. Economists had generally anticipated a moderation to around 7.3%, making the actual figures a welcome surprise.

Prime Minister Narendra Modi expressed his optimism on social media, stating that the 8.2% GDP growth reflects the positive impact of pro-growth policies, reforms, and the hard work of the Indian people. He reiterated the government's commitment to advancing reforms and improving the ease of living for all citizens.

Chief Economic Advisor V Anantha Nageswaran has revised the GDP growth forecast for the entire fiscal year 2026 to at least 7%, a notable increase from the earlier projection of 6.3-6.8%. The Reserve Bank of India (RBI) is also likely to revise its current forecast of 6.8% following this strong second-quarter performance.

A closer look at the sectoral performance reveals the following:

• Manufacturing: Experienced a sharp turnaround, growing by 9.1%.
• Financial & Real Estate Services: Grew by an impressive 10.2%.
• Construction: Expanded by 7.2%.
• Agriculture: Reported a healthy 3.5% increase.

Private consumption emerged as a key driver of this higher real growth. Data indicates a rise in consumption of 7.9% year-on-year in Q2 FY26, compared to 7.0% in the previous quarter. However, government spending witnessed a decline of 2.7% year-on-year, in contrast to a 7.4% increase in the previous quarter.

Experts suggest that the strong GDP numbers indicate a sustained growth trajectory rather than an isolated spike. Factors such as record-low inflation and reforms like GST 2.0 are expected to create room for sustained domestic demand, supporting a constructive medium-term outlook.

Despite the overwhelmingly positive sentiment, some economists remain cautiously optimistic. Concerns remain regarding the relatively low nominal growth rate of 8.7%, suggesting that underlying economic activity is still somewhat subdued. The impact of higher US tariffs also presents a potential risk to demand, and the trajectory of private capital expenditure remains uncertain.

Looking ahead, economists anticipate continued strong GDP growth in the third quarter of FY26, fueled by festive-season demand and pent-up consumption. However, a potential slowdown is expected in the second half of the fiscal year due to the impact of US tariffs and the normalization of government capital expenditure.

Overall, the Indian economy's strong performance in the second quarter of FY26 is a testament to its resilience and the effectiveness of recent policy measures. While challenges remain, the robust growth provides a solid foundation for continued economic expansion in the coming months.