India's GDP grows 8.2% in Q2, fastest in six quarters — is there a catch?
India's GDP grows 8.2% in Q2, fastest in six quarters — is there a catch?
India's economy expands 8.2% in Q2, led by services and manufacturing, prompting questions about sustainability and the narrowing nominal-real GDP gap.
India’s real GDP grew 8.2% in Q2 of FY 2025-26, the fastest pace in six quarters, signaling broad momentum across sectors. Real GDP in the first half (April-September) of FY 2025-26 stood at 8.0%, up from 6.1% in H1 FY 2024-25, underscoring a resilient domestic economy. The quarter saw nominal GDP rising 8.7%, highlighting a narrowing gap between nominal and real growth that economists are watching closely.
Secondary (8.1%) and Tertiary (9.2%) sectors were the key drivers of the gain in Q2, with Manufacturing growing around 9.1% and Construction at about 7.2% at constant prices. In the Tertiary sector, Financial, Real Estate & Professional Services expanded around 10.2%, illustrating robust demand and services-led momentum.
On the demand side, Agriculture and related activities grew moderately (3.5%), while Electricity, Gas, Water Supply and Other Utilities rose around 4.4%. Private Final Consumption Expenditure (PFCE) was up 7.9% in Q2, higher than the 6.4% seen in the year-ago period, signaling healthy domestic consumption supporting the overall expansion.
Analysts point to the narrowing gap between nominal and real GDP growth as a notable feature of this quarter, suggesting that price pressures are not inflating growth as aggressively as before and that the drivers are broad-based across manufacturing and services. Looking ahead, the outlook remains cautiously optimistic, with policymakers watching inflation, external conditions, and investment dynamics as the economy sustains its momentum.
