India has recorded a GDP growth rate of 8.2% in the July-September quarter of 2025, according to provisional estimates released by the National Statistical Office (NSO). This follows a 7.8% expansion in the first quarter, bringing the average growth for the first half of 2025–26 to about 8%.
Officials attribute India’s performance to steady domestic demand, improved manufacturing activity and relatively stable inflation. They also point to ongoing fiscal and structural reforms, including tax rationalisation measures, as contributing factors.
International agencies have noted the positive trend, though with caution about global uncertainties. IMF Managing Director Kristalina Georgieva recently praised India’s reform efforts while also highlighting the need for continued investment and productivity gains to sustain momentum.
Over the last six months, three major rating agencies: Morningstar DBRS, S&P, and R&I have revised India’s sovereign rating upward, citing stronger fundamentals and fiscal consolidation efforts.
Manufacturing indicators also remained buoyant. The Purchasing Managers’ Index (PMI) rose to 59.2 in October from 57.5 in September, signalling continued expansion in output and new orders. The Index of Industrial Production (IIP) grew 3% during April–September. According to official data, this has translated into healthier corporate balance sheets and improved capacity utilisation.
On the demand side, both urban and rural indicators showed improvement. Rural consumption benefited from favourable agricultural conditions, reflected in strong tractor and two-wheeler sales in October. Urban consumption, particularly in smaller towns, also strengthened, with automobile retail sales rising 40.5% year-on-year.
Inflation remained relatively contained, supported by good reservoir levels and improved sowing of Rabi crops, which increased nearly 15% compared to last year. Higher fertiliser sales and stable food supplies have also helped ease price pressures.
India’s external sector continues to provide some support despite global trade uncertainties. Services exports reached a record 38.5 billion dollars in October, helping offset a part of the merchandise trade deficit. Net FDI inflows rose to 7.6 billion dollars during April–September FY26, and foreign exchange reserves were at 687 billion dollars in October, offering a significant buffer against external risks.
While the headline numbers point to continued resilience, economists note that sustaining this growth will require steady private investment, productivity improvements, and careful navigation of global economic challenges.