New Delhi, November 28: India’s economy expanded at a robust 8.2% year-on-year in the July–September 2025 quarter, marking the fastest growth in six quarters.
The growth significantly outpaced economists’ median forecast of 7.3%,and improved over the 7.8% growth recorded in the previous quarter.
What drove the growth
- Private consumption which contributes roughly 57% to GDP — grew by 7.9% reflecting strong consumer demand.
- Manufacturing activity increased 9.1% year-on-year, while construction rose by 7.2%.
- Services, particularly financial, real estate and professional services, showed strong performance within the tertiary sector.
Broader context
The growth comes despite global headwinds and recently imposed 50% tariffs by the U.S. on certain Indian exports. Experts say part of the boost may come from firms front-loading exports ahead of tariff deadlines, and from domestic consumption supported by tax breaks and favourable monetary/fiscal conditions.
Nominal GDP (i.e. at current prices) rose by 8.7% to ₹85.25 trillion in the quarter.
Outlook
While the strong numbers reinforce India’s position as one of the fastest-growing major economies, economists caution that some of the growth may be influenced by favourable statistical effects (like low inflation) rather than purely underlying demand.
As a result, while full-year GDP growth for FY2026 is now expected to remain above 7%, sustaining momentum will depend on continued domestic consumption, export resilience and global economic conditions.
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