India’s Q2 GDP hits 8.2% growth, markets eyes lift-off
India’s Q2 GDP hits 8.2% growth, markets eyes lift-off
India posts 8.2% Q2 GDP, fastest among major economies, boosting hopes for a market lift as manufacturing and services drive growth, with RBI policy in focus.
India delivered an 8.2% GDP growth in the July-September quarter of FY26, a six‑quarter high that outpaced expectations and reinforced its position as the fastest‑growing major economy. The pace marks a strong uptick from the year‑ago period, with growth up 260 basis points, and the half‑year figure (April‑September 2025) showing real GDP rising around 8%. This momentum is underpinned by resilient domestic demand, moderating inflation, and a lift in labour force participation, which hit a six‑month high of 55.4% in October 2025.
The manufacturing sector fanned the gains, with the Index of Industrial Production (IIP) recording a 4% year‑on‑year rise in September 2025 and manufacturing itself expanding by about 4.8%. Services—particularly banking and real estate—also contributed strongly, growing about 10.2% in the period, compared with 7.2% a year earlier. Agriculture, while still positive, slowed to around 3.5% from 4.1% in the year‑ago quarter.
Market watchers say the result could spark positive sentiment for Indian equities as investors reassess growth prospects against a backdrop of easing inflation and a tighter monetary policy regime. Some analysts caution against chasing indices at elevated levels, noting potential volatility and the need to see how the RBI shapes its December policy amid benign inflation readings. After a recent round of net buying in October, the data could influence foreign institutional investors to revisit their stance on Indian markets.
Looking ahead, the government’s policy measures and the RBI’s forthcoming actions will be crucial in sustaining this growth trajectory. If momentum holds, India could maintain its outperformance relative to global peers and sustain a supportive environment for both manufacturing and services sectors.
Cover image source: India’s Q2 GDP surges 8.2%; full-year growth to stay above 7%, says CEA 🔗
