India Posts 8.2% Q2 GDP Growth
Context:
India’s Real GDP grew at a six-quarter high of 8.2% in the second quarter (July-September) of FY 2025-26.
It accelerated from 7.8% in Q1.
Growth in the first half (H1) of FY26 now stands at 8%.
In response, the government revised its full-year growth estimate upwards to 7% or higher.
Sectoral Performance:
Manufacturing recorded robust growth of 9.1% (up from 7.7% in Q1).
This is supported by double-digit corporate performance and a low base effect.
The tertiary sector(services) grew at 9.2%.
The Financial, Real Estate, and Professional Services segment hit a nine-quarter high of 10.2%
Public Administration, Defence, and Other Services grew by 9.7%.
Agriculture’s growth moderated to 3.5%
This was down from 4.1% in the same quarter last year.
Key Indicators & Divergence:
While Real GDP surged, Nominal GDP growth was only 8.7%.
This implies a very low GDP deflator (approx. 0.5% inflation rate), which economists warn signals tepid underlying activity.
CPI inflation eased to 0.25% in October 2025 which is the lowest in the current series.
The low nominal growth (below the budgeted 10.1%) makes achieving the fiscal deficit target of 4.4% more challenging.
Criticism:
The data release coincided with an IMF report giving India's national accounts statistics a 'C' grade(second-lowest).
This has raised questions about data quality and the lack of visible momentum in private investment.