India’s economic growth remained firmly on an upward trajectory in the July–September quarter (Q2) of FY25-26, with real gross domestic product (GDP) rising 8.2%, according to the latest estimates released by the national statistics office (NSO). The performance marks a significant improvement over the 5.6% expansion recorded in the same quarter last year, reflecting sustained industrial activity, strong service sector performance, and resilient consumption trends.
The quarterly GDP release from Union ministry of statistics & programme implementation (MoSPI), published on Friday, highlights a notable acceleration across most key sectors, particularly manufacturing, construction, financial services and real estate. The robust sectoral performance lifted India’s real GDP to ₹48.63 lakh crore in Q2, up from ₹44.94 lakh crore a year earlier. At current prices, nominal GDP grew 8.7% to ₹85.25 lakh crore, indicating broad stability in price trends during the period.
The strong quarter has contributed to an 8% growth rate for the first half (H1) of FY25-26, with real GDP for April–September estimated at ₹96.52 lakh crore, compared with ₹89.35 lakh crore in H1 of the previous year. At current prices, H1 GDP rose 8.8% to ₹171.30 lakh crore. The H1 figures underscore a consistent growth pace across consecutive quarters, reinforcing expectations of sustained economic expansion through the rest of the financial year.
The Q2 performance was underpinned by an impressive 9.1% growth in the manufacturing sector, supported by healthy corporate financial results and improved industrial output indicators, data from NSO shows. Construction, another major contributor within the secondary sector, expanded by 7.2%, reflecting continued public and private infrastructure spending, high consumption of cement and steel, and steady urban economic activity, it added.
The tertiary sector once again proved to be the backbone of the economy, posting 9.2% growth in real gross value added (GVA). Financial, real estate and professional services grew by a notable 10.2%, driven by increased credit flows, higher insurance premiums, expansion in real estate activity and strong performance within professional service segments, MoSPI says.
Trade, hotels, transport and communication services also contributed significantly, with improvements in passenger and cargo movement across railways, airports and ports.
NSO’s data highlights a consistent upsurge in commercial vehicle sales, air traffic and port cargo volumes, signalling sustained recovery in mobility and logistics-intensive sectors.
Overall, real GVA in Q2 rose to ₹44.77 lakh crore from ₹41.41 lakh crore last year, registering a growth rate of 8.1%. Nominal GVA also expanded 8.7% to ₹77.69 lakh crore.
While the overall economic performance remained strong, the primary sector displayed more modest growth. Agriculture and allied activities grew 3.5% in Q2, constrained by uneven monsoon patterns and lower output in certain crop categories. The utilities segment — electricity, gas, water supply and other services — posted a 4.4% rise, indicating steady, though not rapid, expansion in essential services.
"Despite slower growth, the primary sector continues to provide stability, supported by data from the first advance estimates of foodgrain production, horticulture output and livestock performance. Indicators such as coal production and natural gas output also contributed to consistent industrial supply conditions," MoSPI says.
According to the NSO data, private final consumption expenditure (PFCE), a key marker of household spending, grew 7.9% in Q2, surpassing the 6.4% recorded in the same period last year. "The improvement suggests rising demand across both urban and rural markets, aided by higher disposable incomes, increased employment activity and a revival in discretionary spending categories such as travel, retail and services."
Government final consumption expenditure (GFCE) also contributed to overall demand, supported by public spending patterns reflected in central and state government accounts.
For the first half of FY25-26, real GVA reached ₹89.41 lakh crore, registering 7.9% growth. Both secondary and tertiary sectors remained strong through April–September, with manufacturing, construction and services forming the core growth engines.
Transport, communication, real estate and public administration sectors expanded steadily, supported by improved tax collections, rising goods and services output and increased government expenditure. Indicators such as goods and sales tax (GST) collections, bank credit growth, industrial production and cargo movement all pointed to a broad-based economic strengthening.
NSO emphasised that its quarterly GDP estimates are compiled using the benchmark-indicator method, extrapolating earlier-year data using updated sectoral performance indicators. These include industrial production, financial results of listed companies, agricultural output estimates, tax revenues and freight movement, among others.
As MoSPI proceeds with revising the base year for national accounts from FY11-12 to FY22-23, the quarterly estimates released in this note may undergo revisions in subsequent updates. The ministry noted that improved data coverage, new data sources, updated deflators and methodological changes will influence the revised figures.
The first quarterly GDP release under the new base year is scheduled for 27 February 2026.
While some segments such as agriculture face constraints, the economy’s broader fundamentals appear robust, offering a solid platform for continued expansion in the months ahead.
