8.2% GDP growth in 2025-26 Q2 very encouraging: PM Modi
New Delhi, Nov 28: Prime Minister Narendra Modi on Friday said that the 8.2 percent GDP growth in Q2 of 2025-26 was very encouraging.
“The 8.2% GDP growth in Q2 of 2025-26 is very encouraging. It reflects the impact of our pro-growth policies and reforms. It also reflects the hard work and enterprise of our people. Our government will continue to advance reforms and strengthen Ease of Living for every citizen,” PM Modi posted on microblogging site ‘X’.
The PM was responding to the government’s official report, ‘8.2% GDP: India’s Growth Story Strengthens’.
According to the report, India’s economic ascent continues to capture global attention.
The report states that already the world’s fourth largest economy, India, is charting a confident course toward becoming the third largest by 2030, with GDP projected at USD 7.3 trillion.
It said that the current growth phase reflects the strength of decisive policymaking, structural reforms, and India’s deepening global integration.
With growth accelerating, India has once again outpaced global peers, reinforcing its position as the fastest-growing major economy, the report states.
It said that the surge is supported by resilient domestic demand, moderating inflation, and higher labour force participation.
According to the report, a revival in domestic investment and strong investor sentiment signals a stable and broad-based economy.
It said that as reforms gather pace and consumption remains optimistic, India’s economic outlook continues to remain upbeat, signalling sustained momentum and growth across sectors.
ROBUST GDP GROWTH
Gross Domestic Product (GDP), a key indicator of economic performance, reflects the rate at which the country is expanding.
As per the latest data, India’s real GDP, adjusted for inflation, is estimated to grow by 8.2 percent in Q2 of FY 2025-26, up from 5.6 percent during Q2 of FY 2024-25.
In Q1 of FY 2025-26, GDP grew at 7.8 percent, compared to 6.5 percent in Q1 of FY 2024-25. Nominal GDP grew at 8.7 percent in Q2 of FY 2025-26.
Each sector is contributing significantly to this momentum.
The Primary Sector recorded a year-on-year Real GVA growth rate of 3.1 percent in Q2 FY 2025-26.
The Secondary (8.1 percent) and Tertiary (9.2 percent) sectors further boosted overall real GDP growth in the quarter.
INFLATION SHOWS STABILITY
India’s inflation trajectory in October 2025 reflects a remarkable softening, underscoring the economy’s strong fundamentals and effective price management.
Headline inflation, measured by the Consumer Price Index (CPI), eased to 0.25 percent year-on-year - the lowest level in the current CPI series.
Inflation remains well within the RBI’s tolerance band.
The moderation aligns with the RBI’s decision to maintain the repo rate at 5.50 percent with a neutral stance, signalling confidence in price stability and growth prospects.
The decline was driven largely by a sharp moderation in food inflation (CFPI), which registered –5.02 percent over October 2024, owing to easing prices of oils and fats, vegetables, fruits, eggs, cereals, and related products.
The trend also reflects the impact of recent GST rate reductions.
Rural inflation dropped to minus 0.25 percent, while urban inflation stood at 0.88 percent, indicating broad-based easing.
The sustained moderation supports stronger purchasing power, real consumption, and a favourable monetary environment for investment and output expansion.
Wholesale Price Index (WPI) inflation also eased to minus 1.21 percent in October 2025 over October 2024, reflecting declines in food articles, crude petroleum and natural gas, electricity, mineral oils, and basic metals.
WPI Food Index inflation fell to minus 5.04 percent, down from minus 1.99 percent in September 2025, indicating improving business purchasing power and strengthening market sentiment.
GROWING INDUSTRIAL PRODUCTION
India’s Index of Industrial Production (IIP) registered 4.0 percent year-on-year growth in September 2025, driven by a 4.8 percent expansion in the manufacturing sector. \
The rising IIP reflects robust production, higher employment, and stronger investment momentum.
TOP CONTRIBUTORS
The top positive contributors in manufacturing included basic metals (12.3 percent), electrical equipment (28.7 percent), motor vehicles, and trailers and semi-trailers (14.6 percent).
Under use-based classification, strong growth was recorded in infrastructure and construction goods (10.5 percent). consumer durables (10.2 percent), and intermediate goods (5.3 percent).
This diversified expansion across segments signals strong investment activity and resilient consumption demand, reinforcing a well-balanced industrial upturn.
ROBUST EMPLOYMENT GROWTH
India’s labour market continued to show resilience in October 2025.
The Labour Force Participation Rate (LFPR) for persons aged 15 years and above under CWS reached 55.4 percent, the highest in six months, up from 54.2 percent in June 2025.
OTHER INDICATORS
The other indicators also improved with worker participation rate at 52.5 percent (rising since June 2025), female participation at 34.2 percent (highest since May 2025), and unemployment rate at 5.2 percent (unchanged since September 2025).
The Employees’ Provident Fund Organization (EPFO) recorded 21.04 lakh net new members in July 2025, a 5.55 percent rise over July 2024, reflecting growing job opportunities, better awareness of benefits, and effective outreach programmes.
The improving employment scenario indicates rising incomes, job security, and enhanced job quality - contributing to sustained productivity and economic expansion.
TRADE PERFORMANCE IMPROVES
India’s external sector remained strong in April-October 2025.
Combined exports of merchandise and services rose 4.84 percent to USD 491.80 billion, compared to USD 469.11 billion a year earlier.
Merchandise exports grew 0.63 percent to USD 254.25 billion, driven by demand from Spain (40.74 percent), China (24.77 percent), Hong Kong (20.7 percent), the USA (10.15 percent), and the UAE (5.88 percent).
GROWTH SECTORS
The growth sectors included marine products (16.18 percent), meat, dairy and poultry (23.97 percent), other cereals (25.52 percent), cashew (28.32 percent), and electronic goods (37.82 percent).
Services exports grew 9.75 percent to an estimated USD 237.55 billion, highlighting India’s competitiveness in computer and business services.
SUCCESS OF GST 2.0
The government’s GST 2.0 reforms introduced a simplified two-slab structure of 5 percent and 18 percent with widespread rate rationalisation across key sectors, including common goods, labour-intensive industries, agriculture, and healthcare.
Gross GST collections in October 2025 stood at Rs 1.96 lakh crore, up 4.6 percent from Rs 1.87 lakh crore in October 2024.
The rise aligns with the onset of rate rationalisation and robust festive-season consumption.
Reduced GST rates have lowered costs, boosted household savings, and expanded the tax base - improving revenue stability and strengthening long-term economic resilience.
INDIA’S GROWTH PROJECTIONS STRENGTHEN
India’s growth outlook continues to brighten, with major institutions upgrading projections with RBI growing with 6.8 percent for FY 2025-26 (up from 6.5 percent), World Bank at 6.5 percent (2026), Moody’s at 6.4 percent (2026) and 6.5 percent (2027), IMF 6.6 percent (2025) and 6.2 percent (2026), OECD 6.7 percent (2025) and 6.2 percent (2026), and S&P at 6.5 percent (FY 2026) and 6.7 percent (2027).
These upward revisions underscore international confidence in India’s economic fundamentals and its capacity to sustain robust, domestically driven growth despite evolving global uncertainties.
