India’s GDP surges 8.2% in Q2, beating forecasts despite global trade pressures

India’s economy grew 8.2 percent in the July–September quarter, beating expectations and accelerating from the 7.8 percent recorded in the previous quarter, official data showed on Friday.

The latest growth figure surpassed market forecasts, with economists polled by Reuters projecting expansion of around 7.3–7.4 percent for the period.

The quarter saw strong consumer spending and manufacturing activity despite global trade uncertainties. The period also coincided with the United States imposing an additional 25 percent punitive tariff on Indian exports, raising the total levy to 50 percent.

Economists said the stronger-than-expected performance was aided by a favourable deflator, improved consumer demand and front-loaded export activity.

Madhavi Arora, chief economist at Emkay Global Financial Services in Mumbai, said growth “exceeded expectations dramatically to 8.2 percent,” supported by statistically favourable deflator effects, lagged effects of monetary and regulatory easing and a limited hit so far to exports. She added that some of these factors would spill over into the next quarter along with improving consumer demand, keeping FY26 GDP growth “comfortably hugging 7 percent+.”

Garima Kapoor, economist at Elara Securities in Mumbai, said the “blockbuster GDP growth” was driven by front-loading of exports and strong government spending, particularly capital expenditure, aided by a supportive base effect. She said full-year FY26 growth would now be close to 7.5 percent, “way above the RBI’s and government’s estimate.”

Suvodeep Rakshit, chief economist at Kotak Institutional Equities in Mumbai, noted that nominal GDP growth at 8.7 percent reflected a “relatively soft patch” for the economy even as real GDP growth of 8.2 percent signalled sustained underlying strength. He said activity in the quarter was partly weighed down by subdued production and sales during the GST rate transition phase. He expects GDP growth to remain strong in Q3 FY26, supported by festive demand and pent-up consumption, keeping real GDP growth on track to average around 7.5 percent for FY2026.

Upasna Bhardwaj, chief economist at Kotak Mahindra Bank in Mumbai, said the higher-than-expected GDP print was broad-based but came on the back of a very low deflator. She said single-digit nominal GDP growth indicated tepid activity and maintained expectations of a 25 basis point rate cut in the upcoming policy review due to a benign inflation trajectory.

Sakshi Gupta, principal economist at HDFC Bank in Gurugram, said the tariff impact was yet to play out as the front-loading of shipments fades. She cautioned that the sustainability of festive-season demand remains uncertain given tentative urban hiring trends. She expects an upward bias to the bank’s full-year growth forecast of 7.2 percent.

Devendra Pant, chief economist at India Ratings and Research in New Delhi, said the Q2 FY26 growth of 8.2 percent was above consensus and was driven by manufacturing, finance, business services, public administration and defence on the supply side. On the demand side, consumption and investment supported growth. He noted that falling inflation was visible in the nominal GDP growth figure, which makes the fiscal arithmetic for FY26 difficult. Strong first-half growth, however, has improved prospects for the full year.

Radhika Rao, senior economist at DBS Bank in Singapore, said the MPC faces a difficult task in the December rate review given strong growth alongside record-low inflation. She expects policymakers to emphasise forward-looking guidance and the high real rate buffer to justify further easing.

Kunal Kundu, India economist at Societe Generale in Bengaluru, said there were “no signs of deceleration” despite widespread forecasts, but pointed out data-related challenges. He said the GDP deflator provided a significant boost and discrepancies contributed as much as 3.3 percent of GDP. While nominal discrepancies were negative, real discrepancies were positive and substantial. He said this requires deeper analysis because identifying specific growth drivers is difficult given the contrast between headline GDP and multiple high-frequency indicators.

(With inputs from agencies)