India’s Q2 GDP Growth Hits 8.2% in FY 2025-26; Nominal GDP Climbs 8.7%, Services and Manufacturing Sector Lead

India's economic momentum strengthened in the second quarter of the current financial year, with real GDP growing at 8.2% in Q2 FY 2025-26, according to official data released by the government on Friday. This marks a significant improvement from the 5.6% growth recorded in the same quarter of FY 2024-25, underscoring a broad-based recovery across key sectors.

India's GDP Growth Accelerates to 8.2% in Q2 FY 2025-26; Nominal GDP Expands By 8.7%

Meanwhile, nominal GDP expanded by 8.7% during the quarter, marking the fastest growth in the past 18 months.

Key Factors Driving India's GDP Growth

The latest data shows that India's real GDP growth surpassed the 8% mark, largely on the back of impressive performance in both the Secondary and Tertiary sectors.

The Secondary Sector registered 8.1% growth, with Manufacturing emerging as a standout performer at 9.1%, signalling rising industrial output and a revival in production-related activities. The Construction sector also continued to strengthen, clocking 7.2% growth at constant prices, supported by increased infrastructure spending, housing demand, and improved project execution.

Services Sector Continues to Lead with 9.2% Expansion

The Tertiary Sector, which forms a major pillar of India's economy, posted a robust 9.2% growth in Q2 as per figures shared by the National Statistics Office (NSO).

A key contributor to this was the Financial, Real Estate, and Professional Services segment, which recorded an impressive 10.2% growth, reflecting strong credit activity, real estate demand, and professional service expansion.

Private consumption demonstrated strong momentum in Q2, with real private final consumption expenditure (PFCE) rising 7.9%, up from 6.4% in the same quarter last year, indicating resilient household demand despite the challenges posed by an uneven monsoon

Agriculture and Utilities Show Moderate Growth

In contrast to the stronger sectors, Agriculture and Allied activities grew at a more modest 3.5%, influenced partly by erratic weather patterns and uneven monsoon distribution.
Similarly, Electricity, Gas, Water Supply, and Other Utility Services clocked a 4.4% growth rate, remaining relatively stable but slower compared to industry and services.

"The blockbuster GDP growth has been led by front loading of exports along with strong government spending especially capex amid 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 RBI's and govt's estimate," Garima Kapoor, Deputy Head of Research and Economist, Elara Capital.

India's H1 FY26 GDP Rises 8%, Q2 GVA Expands 8.1%

In the first half of FY26, India's GDP grew by 8%, up from 6.1% in the same period last year, while real GVA expanded 8.1% in Q2, driven by broad-based growth across major sectors.

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