New Delhi, Nov 28: India’s economy grew 8.2% in the second quarter of FY26—the strongest pace in six quarters—on the back of a manufacturing revival and double-digit services growth, even as farm activity slowed, according to new NSO estimates.
The expansion beats the 7.8% recorded in Q1 and far exceeds the 5.6% seen a year earlier. With this, India remains the fastest-growing major economy, ahead of China’s 4.8% during the same quarter.
Manufacturing output, boosted by festival-season demand following the GST rate cut implemented on September 22, rose 9.1%. Services registered 10.2% growth, lifted by banking, real estate and business activity. Agriculture moderated to 3.5%, down from 4.1%.
The first half of FY26 has delivered 8% growth, higher than last year’s 6.1%, and well above the government’s projection of 6.3–6.8% for the full year. “The Q2 numbers have certainly changed the trajectory,” a senior government official said.
Icra’s Aditi Nayar said the GDP print “displayed an acceleration over Q1 and exceeded widespread market expectations.” She noted that subdued government consumption and moderated investment growth were offset by a sharp rise in discrepancies. “Despite risks from US tariffs and constrained fiscal space, FY26 GDP now looks set to exceed 7%,” she said.
Nayar added that the stronger Q2 data “reduces the likelihood of a rate cut in the December MPC review,” despite lower retail inflation in October.
Private consumption rose 7.9% in Q2, while nominal GDP increased 8.7% year-on-year. The quarter also saw a rise in discrepancies to ₹1.62 lakh crore, according to the NSO.
Deloitte India economist Rumki Majumdar said festive demand and momentum from “GST 2.0” could lift full-year growth further. But she warned that the lower GDP deflator “poses concerns for fiscal deficit and debt ratios,” noting that meeting fiscal targets “will be increasingly difficult.”
