FILE PHOTO: A general view of the skyline in Mumbai, India, May 5, 2025. REUTERS/Francis Mascarenhas/File Photo
FILE PHOTO: A man shows interior of a metro rail component in production inside a manufacturing unit of Titagarh Rail Systems Ltd. (TRSL) in Uttarpara, India, June 18, 2025. REUTERS/Sahiba Chawdhary/File Photo

(Reuters) -India's economy grew 8.2% year-on-year in July-September, accelerating from the 7.8% growth reported in the previous quarter, as strong consumer spending and manufacturing remained key drivers amid global trade uncertainties.

Economists polled by Reuters had forecast a 7.3% expansion for the quarter ended September, a period when the U.S. imposed an additional 25% punitive tariff on Indian exports, raising the total levy to 50%.

MADHAVI ARORA, CHIEF ECONOMIST, EMKAY GLOBAL FINANCIAL SERVICES, MUMBAI

"Growth 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.

Some of these factors will spill over to Q3 as well, along with improvement in consumer demand, leading to FY26E GDP comfortably hugging 7%+ print."

GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI

"The blockbuster GDP growth has been led by front-loading of exports along with strong government spending, especially capex, amid a supportive base effect.

With today's print, full year FY26 GDP growth will now see an upside and will be close to 7.5%, way above the RBI's and government's estimate."

SUVODEEP RAKSHIT, CHIEF ECONOMIST, KOTAK INSTITUITIONAL EQUITIES, MUMBAI

"Nominal GDP growth at 8.7% in Q2 FY26 continued to reflect a relatively soft patch for the Indian economy.

In contrast, on the back of a low deflator, real GDP growth at 8.2% continues to signal sustained underlying strength.

Activity in the quarter was partly weighed down by nearly a month of subdued production and sales activity during the GST rate transition phase.

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. Real GDP growth remains on track to average around 7.5% in FY2026."

UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI

"The sharply higher-than-expected Q2 FY26 GDP was broad-based but comes on the back of a very low deflator.

The single digit nominal GDP growth continues to signal tepid underlying activity. Despite the high real GDP growth, we retain our expectations of 25bp of rate cut in the upcoming policy as inflation trajectory remains benign."

SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM

"Going forward, the tariff impact is yet to play out as the front-loading effect fades. Moreover, what remains uncertain is whether the jump up in demand seen during the festive season would sustain over the coming months, especially given that urban hiring trends remain tentative.

Given the strong Q2 GDP number, we see an upward bias to our GDP growth forecast for full year at 7.2%.

DEVENDRA PANT, CHIEF ECONOMIST, INDIA RATINGS AND RESEARCH, NEW DELHI

"Q2 FY26 growth at 8.2% was higher than the consensus. The growth on the supply side was driven by manufacturing, finance, business services, public administration and defence.

On the demand side, growth was driven by consumption and investment demand. The impact of decline in inflation was evident in the nominal GDP growth of 8.7% in Q2 FY26. This makes fiscal arithmetic for FY26 difficult. Strong H1 FY26 growth has brightened the scope for high GDP growth in FY26.

RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE

"The MPC faces a challenging act at the December rate review, with the mix of a strong growth print and record low inflation.

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."

KUNAL KUNDU, INDIA ECONOMIST, SOCIETE GENERALE, BENGALURU

"Contrary to widespread forecasts, there are no signs of deceleration. However, data-related challenges remain prominent.

A significant boost came from the GDP deflator, while discrepancies also played a major role, contributing as much as 3.3% of GDP.

Interestingly, nominal discrepancy was negative (-2.9% of GDP), yet real discrepancy was positive and substantial. This warrants deeper analysis, but at first glance, identifying the specific growth drivers is difficult, especially given the stark contrast between GDP figures and signals from multiple high-frequency indicators."

SUJAN HAJRA, CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI

"India's real GDP growth for the quarter ending September 2025 came in at 8.2%, well above our projections and ahead of consensus estimates. Growth was broad-based on both GDP and GVA metrics.

Despite robust growth and a benign inflation environment, we expect the Monetary Policy Committee of the Reserve Bank of India to deliver a 25 bps policy rate cut in the upcoming review. The prevailing macroeconomic configuration—strong output momentum, low inflation, and the prospect of monetary easing—continues to support a favourable outlook for Indian equities."

ADITI NAYAR, CHIEF ECONOMIST, ICRA LTD, GURUGRAM

"An adverse base, the potential negative impact of U.S. tariffs, and limited headroom for capital spending by the Government of India may dampen the pace of growth from the robust 8.0% seen in H1 FY2026. Nevertheless, the FY2026 real GDP expansion now appears set to materially exceed 7%.

With the Q2 FY2026 GDP growth exceeding 8%, the probability of a rate cut in the December 2025 MPC review has certainly eased, notwithstanding the series-low CPI inflation print for October 2025."

RAJEEV SHARAN, HEAD – CRITERIA, MODEL DEVELOPMENT & RESEARCH, BRICKWORK RATINGS, BENGALURU

"India's Q2 FY2026 GDP growth at 8.2% highlights robust momentum in manufacturing, construction, and services, lifting H1 growth to 8.0%.

This performance, well above earlier projections, underscores India's resilience as the fastest-growing major economy.

We expect full-year real GDP growth to hover around 7.2%.

From a credit rating perspective, sustained high growth enhances fiscal capacity and cushions external risks, though advancing structural reforms and sustaining investment momentum will be critical to preserving sovereign credit strength over the medium term."

(Reporting by Komal Salecha, Anuran Sadhu, Mridula Kumar, Yagnoseni Das, Hritam Mukherjee, Manvi Pant, Nishit Navin, Ananta Agarwal and Meenakshi Maidas; Compiled by Abinaya Vijayaraghavan; Editing by Janane Venkatraman)