India’s GDP grew by an impressive 8.2% in the second quarter of FY2025–26, marking the strongest expansion in six quarters and outperforming most global economies currently dealing with slowdowns, inflation, and geopolitical uncertainties. What makes the growth notable is that it comes despite the continued impact of Trump-era tariffs on multiple export segments, including steel, chemicals and select IT services.
According to government data, the boost primarily came from manufacturing, construction, and financial services, all of which showed double-digit expansion. Domestic consumption also remained resilient, supported by improved demand in urban markets and steady rural recovery. Public infrastructure spending added further momentum.
Economists note that India has demonstrated strong macroeconomic stability at a time when several countries are grappling with recessionary pressures. While tariffs affected export competitiveness in select sectors, India’s diversified trade partnerships and rising domestic production helped cushion the impact. The services sector, particularly digital services and fintech, continued to be a major contributor to economic activity.
However, challenges remain. Exporters continue to push for renegotiations or relaxations on tariff barriers, while MSMEs say increased input costs are affecting profitability. Economists also warn that global uncertainties, ranging from energy price fluctuations to political instability, could influence future quarters.
Still, the 8.2% rise reinforces India’s position as one of the fastest-growing major economies in the world, strengthening investor confidence ahead of the upcoming financial year.
