India ‘s GDP growth rate accelerates to 8.2% in Q2 FY26 despite Trump tariffs

India’s GDP growth rate stood at 8.2% in Q2 FY26 versus 7.8% in Q1 FY26 and 5.4% in Q1 FY25, according to data put out by the National Statistical Office.

India’s economy grew at the fastest pace in six quarters in July-September 2025, underscoring the resilience of the world’s fourth largest economy in the face of steep Trump tariffs.

India’s GDP growth rate stood at 8.2% in Q2 FY26 as against 7.8% in Q1 FY26 and 5.4% in the year-ago period, according to data released by the National Statistical Office on Friday. Economists polled by Reuters had estimated the GDP print at 7.3%, while an SBI Research report pegged the figure at 7.5%. Bloomberg had an estimate of 7.4%.

• Consumption rose 7.9% YoY in Q2 FY26 vs 7.0% in Q1 FY26
• Manufacturing output rose 9.1% YoY in Q2 FY26 vs 7.7% in Q1 FY26
• Construction activity grew 7.2% YoY in Q2 FY26 vs 7.6% in Q1 FY26
• Government spending down 2.7% YoY vs 7.4% up in Q1 FY26

“[India’s GDP] growth rate has exceeded expectations dramatically to 8.2%, led by statistically favourable deflator effects, lagged effects of monetary and regulatory easing and a limited hit so far on India’s exports,” Madhavi Arora, chief economist at Emkay Global Financial Services Ltd., told Reuters.

On 23 August, the United States imposed 50% tariffs on India’s exports due to its import barriers and purchase of Russian oil, which President Donald Trump said was fueling Moscow’s war in Ukraine. On 22 September, GST 2.0 came into effect to reduce tax on hundreds of items—from soaps to small cars—to spur domestic consumption. The impact of both the moves has yet to show meaningfully in India’s quarterly GDP growth figures.

“The MPC faces a challenging act at the December rate review, with the mix of a strong growth print and record low inflation,” Radhika Rao, senior economist at DBS Bank Singapore, told Reuters. “We expect an emphasis on forward-looking growth guidance and high real rate buffer due to weak inflation to justify a move to lower rates further.”

India Q2 GDP @ 8.2% — Economists’ Take

• Garima Kapoor, economist at Elara Securities: “The blockbuster GDP growth has been led by front-loading of exports along with strong govt spending, especially capex, amid a supportive base effect.”
• Suvodeep Rakshit, chief economist at Kotak Institutional Equities: “Looking ahead, GDP growth is expected to print strongly again in Q3 FY26, supported by festive-season demand and pent-up consumption at the start of the quarter. India’s real GDP growth remains on track to average around 7.5% in FY26.”
• Upasna Bhardwaj, chief economist at Kotak Mahindra Bank: “The single-digit nominal GDP growth continues to signal tepid underlying activity. Despite the high real GDP growth, we retain our expectations of 25 bps of rate cut in the upcoming policy as inflation remains benign.”