NEW DELHI: India’s economy grew at 8.2% in the second quarter of FY26, beating all estimates and marking the fastest pace in six quarters. This is a big jump from the 5.6% growth in the same period last fiscal. Most analysts had expected the Q2 growth to be in the range of 7–7.5%.
The strong performance is attributed to a boost in manufacturing, rising rural demand, and sustained growth of the services sector. Manufacturing grew at a robust 9.1% — more than four times the 2.2% recorded a year ago. Economists attribute this partly to frontloading of exports to the US ahead of the 50% tariff increase.
Construction also saw healthy expansion, growing at 7.2%. The services sector continued its positive momentum, clocking 9.2% growth in Q2 compared to 7.2% a year earlier.
Private consumption remained strong with 7.9% growth, compared to 6.4% last year and 7% in Q1. Gross fixed capital formation — an indicator of infrastructure and asset creation — maintained its rise at 7.3% versus 6.7% a year ago, although slightly lower than the 7.8% in Q1.
“The confluence of stable inflation, sustained public capex, and reform momentum positions the economy to navigate risks, as reflected in upward revisions to FY26 GDP growth projections by various agencies,” said Chief Economic Advisor V Anantha Nageswaran. He added that India becoming a $4 trillion economy “as early as next year” is not unrealistic.
The government has highlighted the role reductions in GST rates played in lowering the cost of goods and services, supporting consumption and expanding the tax base.
However, economists cautioned that slower nominal growth could pose risks. Nominal GDP grew 8.7% in Q2, reaching an estimated Rs 85.25 lakh crore.