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India Q2 GDP Growth Data 2025: The economy continued to expand at a faster-than-anticipated rate in July-September, with GDP growth rising to a six-quarter high of 8.2 per cent on the back of near double-digit growth in the services sector. The manufacturing sector, too, expanded at the fastest pace in six quarters.
Economists had broadly expected that GDP growth would moderate to 7.3 per cent from 7.8 per cent in April-June. However, the growth rate unexpectedly rose for the fourth quarter in a row in July-September.
“The 8.2% GDP growth in Q2 of 2025-26 is very encouraging. It reflects the impact of our pro-growth policies and reforms. It also reflects the hard work and enterprise of our people. Our government will continue to advance reforms and strengthen Ease of Living for every citizen,” Prime Minister Narendra Modi stated in a post on X.
In a briefing after the data was released, Chief Economic Advisor V Anantha Nageswaran said GDP growth for 2025-26 as a whole will now be at least 7 per cent. This is an upward revision from his previous forecast of 6.3-6.8 per cent.
The Reserve Bank of India’s (RBI) current growth forecast for 2025-26 stands at 6.8 per cent. But with second-quarter growth exceeding expectations by a wide margin — the central bank had predicted a growth rate of 7 per cent — the RBI could raise its projection next week at the conclusion of the Monetary Policy Committee’s (MPC) meeting.
“GDP growth numbers fared better than our above consensus forecast, driven by higher public investments, services demand, industrial output and firm consumption, besides statistical effects on account of GDP deflators and a low base,” Radhika Rao, Senior Economist at DBS Bank, said on the second quarter GDP data.
The Gross Value Added (GVA) of manufacturing rose by 9.1 per cent in July-September, up from 7.7 per cent in April-June and 2.2 per cent in the second quarter of 2024-25. Construction growth remained robust at 7.2 per cent after having grown 7.6 per cent in April-June and 8.4 per cent in July-September 2024.
Industry as a whole posted a growth of 7.7 per cent, up from 6.3 per cent in April-June. The services sector, meanwhile, expanded by more than 9 per cent for the second quarter in a row on the back of the “Financial, Real Estate & Professional Services” component growing 10.2 per cent and “Public Administration, Defence & Other Services” seeing a growth of 9.7 per cent. Agriculture, meanwhile, saw its GVA grow 3.5 per cent.
“The only sector which has had a deceleration in this second quarter is mining and quarrying, which is to be expected given that it was the monsoon season during this period,” Ministry of Statistics and Program Implementation (MoSPI) Secretary Saurabh Garg, who also present at the briefing, said.
The overall GVA growth rate rose to 8.1 per cent from 7.6 per cent the previous quarter and 5.8 per cent in July-September 2024. The GDP is calculated by adding net indirect taxes — indirect taxes such as GST minus subsidies — to GVA.
The GDP growth rate without adjusting for inflation, or nominal GDP growth, declined to a four-quarter low of 8.7 per cent in July-September from 8.8 per cent in April-June. Economists warned that nominal must be monitored. “The below-trend nominal GDP growth has significant implications for the fiscal aggregates,” D K Srivastava, Chief Policy Advisor, EY India, said, adding that the gross tax revenues were up just 4 per cent in the first seven months of 2025-26.
“For the 1H (April-September), the GTR (gross tax revenue) buoyancy is only 0.32 as against a budgeted buoyancy assumption of 1.1,” Srivastava further said. According to him, to meet the 12.5 per cent growth in gross tax revenues over what was collected in 2024-25 as per data from Controller General of Accounts, a growth of 22.3 per cent would be needed in the last five months of 2025-26.
As expected, private consumption growth rose for the second quarter in a row in July-September due to the combination of low inflation and GST cuts that came into effect from September 22. Private Final Consumption Expenditure rose 7.9 per cent after having increased 7 per cent in April-June and 6 per cent in January-March.
According to Dharmakirti Joshi, Crisil’s Chief Economist, lower food inflation has led to higher discretionary spending, with the rationalisation and reduction in GST rates boosting private consumption, complementing the reduced income tax rates and the interest rate cut. “Consequently, we have raised our forecast of India’s GDP growth for this fiscal to 7 per cent, up from 6.5 per cent,” Joshi said.
The economist expects GDP growth to slow down in the second half of the current fiscal to 6.1 per cent from 8 per cent in the first half, or April-September, due to the impact of higher US tariffs and normalisation of the government’s capital expenditure.
A 31 per cent rise in the Government’s capital expenditure in July-September helped push up Gross Fixed Capital Formation — a proxy for investments — by 7.3 per cent. While this was down from a growth of 7.8 per cent in April-June, it was higher than an increase of 6.7 per cent in the second quarter of 2024-25.
According to ANZ Economists Dhiraj Nim and Sanjay Mathur, private investment “also appears to be gaining some ground, supported by strong investment intentions and an uptick in credit growth”. However, Nim and Mathur cautioned that how private capex moves forward remains uncertain due to risks to demand from the US tariffs.
Government Final Consumption Expenditure was down 2.7 per cent in July-September after a 7.4 per cent rise in April-June and 4.3 per cent in July-September 2025.
The high GDP growth number comes days before the RBI’s Monetary Policy Committee (MPC) begins its three-day meeting on December 3, with Governor Sanjay Malhotra scheduled to announce the interest rate decision at 10 am on December 5.
With headline retail inflation at a record low of 0.25 per cent in October, the MPC was widely expected to cut the policy repo rate for the first time since June prior to the release of the GDP data Friday.
