India’s real GDP surged 8.2% in Q2 FY26, marking a six-quarter high and demonstrating the economy’s strong resilience even amid US tariff pressures.

Backed by robust consumption, strong manufacturing output, and buoyant services activity, the Indian economy outperformed expectations in the July–September quarter of FY26. This 8.2% real GDP expansion also surpassed the previous quarter’s 7.8% growth, confirming that domestic economic fundamentals remain strong despite global uncertainties.

Manufacturing & Services Drive the Surge

Manufacturing showed impressive momentum due to improved capacity utilisation and strong festival-season production. Services — particularly finance, real estate, logistics, and digital industries — recorded broad-based growth.

Resilience Despite US Tariff Impact

The growth came even as the US, under President Donald Trump’s renewed tariff policy, imposed higher duties on selected Indian exports. Analysts had expected these tariffs to slow growth; however, India’s domestic demand, investment push, and consumption resilience limited the impact.

Consumption & Investment Stay Strong

Private final consumption expenditure remained strong, supported by lower inflation and improved consumer sentiment. Gross Fixed Capital Formation also rose, reflecting sustained investment activity and business confidence.

Outlook

With domestic fundamentals strong and reforms ongoing, India remains one of the fastest-growing major economies globally. Economists now expect FY26 GDP growth to be revised upward, though global trade tensions

remain a key risk.