India's Q2 GDP Growth Surges to 8.2% Amidst Global Challenges

2025-11-28 economy

New Delhi, Friday, 28 November 2025.
India’s GDP grew by 8.2% in Q2 FY2025-26, the fastest among major economies, driven by manufacturing and services, despite U.S. tariff impacts. Growth exceeds previous forecasts and reinforces India’s economic resilience.

Drivers of Robust Growth in Q2

India’s remarkable GDP growth of 8.2% in the second quarter of FY2025-26 has been propelled by significant expansion in the manufacturing and services sectors. This period marked the fastest growth among major global economies, showcasing India’s resilience amid global economic challenges. Notably, the manufacturing sector expanded by 9.1%, while the services sector, including financial, real estate, and professional services, saw a growth of 10.2% [3][5].

Impact of U.S. Tariffs and Domestic Strategies

Despite the pressures from increased U.S. tariffs, India’s economic performance exceeded expectations, largely due to strategic front-loading of exports and robust domestic demand. This proactive export strategy helped mitigate potential negative impacts from international trade tensions [1][4]. Additionally, the government’s fiscal policies and infrastructural investments played a crucial role in sustaining domestic consumption, which accounts for a significant portion of the GDP [5].

Forecasts and Future Economic Outlook

Economists predict that while the GDP growth rate is impressive, it may moderate in the upcoming quarters. The Reserve Bank of India (RBI) is expected to cut the policy rate by 25 basis points to 5.25% on December 5, 2025, to stimulate further economic activity and support nominal growth. This move is anticipated as part of efforts to maintain economic momentum in the face of global uncertainties [2][7]. According to the International Monetary Fund (IMF), India’s GDP growth is projected to average 6.6% for the fiscal year 2025-26, with a slight moderation expected in the following year [1][6].

Sectors Leading the Growth Charge

The secondary sector, including construction and manufacturing, contributed significantly to the GDP growth, recording an 8.1% increase. The tertiary sector, which encompasses services like trade, hotels, and communication, grew by 9.2%, further bolstering the economy. Agriculture also saw a steady growth of 3.5%, reflecting a balanced contribution from various sectors of the economy [3][5].

Sources

GDP growth India economy