India’s economy has posted its highest quarterly growth in six quarters, with Gross Domestic Product (GDP) expanding by 8.2% in the quarter ending September 2025, signaling strong momentum across multiple sectors and reaffirming India’s position as the fastest-growing major economy in the world. The latest numbers, released by the National Statistical Office (NSO) on Friday, also mark a notable beat over expectations, exceeding the Bloomberg consensus forecast by 80 basis points.

Quarterly and Half-Year Performance

The September quarter growth represents an increase over the 7.8% recorded in the quarter ending June 2025, and places the first half of the fiscal year 2025-26 at a robust 8%—the highest half-year growth in three years. Gross Value Added (GVA), which excludes net indirect taxes from GDP, grew by 8.1% in the quarter, marking an eight-quarter high and underlining broad-based production gains across manufacturing and services.

Prime Minister Narendra Modi described the GDP growth as “very encouraging,” highlighting that it reflects the impact of pro-growth policies, structural reforms, and the hard work and enterprise of the Indian people. “Our government will continue to advance reforms and strengthen Ease of Living for every citizen,” he said on X.

Union Finance Minister Nirmala Sitharaman pointed to sustained fiscal consolidation, targeted public investments, and productivity-enhancing reforms as key drivers of growth. “Various high-frequency indicators also point to continued economic momentum and broad-based consumption growth,” she added. Chief Economic Adviser V Anantha Nageswaran noted that with two consecutive quarters of strong growth, India is comfortably positioned to record an annual GDP growth rate north of 7%, exceeding most institutional forecasts, including the Reserve Bank of India’s (RBI) projection of 6.8% for 2025-26.

Sectoral Performance

The latest GDP data shows a strong performance across sectors, though with some variations. Manufacturing growth accelerated for the fourth consecutive quarter, reaching 9.1% in September 2025. Services, while seeing a marginal slowdown of five basis points from the previous quarter, still recorded a robust 9.2% growth. Agriculture, however, continues to lag, with growth slowing for the fourth consecutive quarter to 3.5%.

On the expenditure side, Private Final Consumption Expenditure (PFCE) expanded by 8% in the September quarter, compared with 7.1% in the preceding quarter, providing a strong underpinning to overall GDP growth. Government consumption, investment, and exports showed more modest gains, but the consumption tailwind was sufficient to lift headline growth.

Macroeconomic Implications

The strong GDP performance underlines India’s macroeconomic resilience, supported by low inflation, healthy agricultural production, and robust GST collections. As of October 2025, cumulative GST collections grew by 9% for the April-October period, reflecting firm consumption and improved compliance. With core inflation remaining stable, timely Rabi sowing, and ample reservoir levels, the outlook for food supply is benign, further supporting consumption-led growth.

Economists note that real GDP growth has outpaced RBI forecasts, which had projected 7%, 6.4%, and 6.2% for the quarters ending September, December, and March 2026, respectively. With real growth trending above 8%, the Indian economy is expected to cross the $4 trillion mark by the end of the current fiscal year, up from $3.9 trillion at the end of March 2025.

Nominal GDP and Fiscal Considerations

While real GDP growth is at aspirational levels, nominal GDP—reflecting the non-inflation-adjusted value of output—remains somewhat below expectations. Nominal GDP grew by 8.7% in the September quarter and 8.8% for the first half of the fiscal year, compared to the 10.1% assumption in the Union Budget for FY26. This is significant for fiscal and revenue planning, as tax revenues and government borrowing depend on nominal GDP.

JP Morgan Chief India Economist Sajjid Chenoy highlighted that slower nominal growth necessitates recalibration of corporate earnings, credit, and tax growth projections. For instance, gross tax collections have grown only 2.7% so far, falling short of the 12.5% growth assumed in the budget, even before factoring in tax cuts.

Some of the boost to real GDP may also reflect lower-than-expected inflation, which keeps the GDP deflator low. As retail and wholesale inflation stabilizes at higher levels, this statistical uplift may moderate. Nonetheless, the real growth trajectory points to a strong economic expansion and robust domestic demand.

Policy Implications and Outlook

The GDP data reinforces confidence in India’s policy framework, which combines macroeconomic stability with structural reforms aimed at improving productivity and ease of doing business. A potential rate cut by the RBI in its December meeting could further enhance growth momentum, particularly in consumption and investment sectors.

Economists also highlight the role of targeted government investment, high-frequency economic activity indicators, and a rebound in private consumption as critical drivers of sustained momentum. The composition of growth—with strong contributions from manufacturing and services—suggests that the economy is not only expanding but also diversifying, reducing reliance on any single sector.

In conclusion, India’s 8.2% GDP growth for the quarter ending September 2025 underscores the resilience and dynamism of the economy. With robust sectoral performance, sustained consumption growth, and supportive macroeconomic policies, the country is on track to outperform most forecasts for FY26, even as policymakers monitor nominal GDP trends to ensure fiscal and revenue stability. The data reinforces India’s position as a global growth leader, providing optimism for continued expansion, job creation, and investment opportunities in the coming quarters.