India’s real GDP expanded by 8.2 per cent in the July–September quarter of FY26, according to data released recently by the National Statistics Office under the Ministry of Statistics and Programme Implementation. The growth compares favourably with the 5.6 per cent rise recorded in the same period last year.

Economists attributed the acceleration to improving factory output. Aditi Gupta, Economist at Bank of Baroda, noted that the rebound in manufacturing played a pivotal role, supported by sustained momentum in services.

In its assessment, SBICAPS highlighted above-normal monsoon conditions, robust services activity, GST rate rationalisation and steady construction growth as major contributors to the upbeat performance. The firm expects FY26 real GDP growth to exceed 7 per cent, with a mild moderation in the second half. It added that nominal GDP could remain subdued as inflation eases, projecting an 8.5 per cent year-on-year rise.

SBICAPS observed that the additional 25 per cent tariff imposed by the US could weigh on near-term goods exports, although stable global growth and resilient remittances may help offset pressure on the trade balance.

Calling the results an affirmation of economic resilience, Nirmal Kumar Minda, President of ASSOCHAM, said the latest figures demonstrate strong fundamentals, with broad-based sectoral expansion and improving domestic demand supporting growth. He added that policy continuity has helped maintain India’s position among the fastest-growing major economies.

Ajay Srivastava, Founder of the Global Trade Research Initiative, welcomed the momentum, emphasising that it could absorb some workforce displacement from export-oriented sectors affected by US tariffs. However, he cautioned that domestic demand cannot fully replace lost export markets in labour-intensive industries, urging efforts to restore global competitiveness. He said that recent reforms—including GST rationalisation, labour changes and the rollback of certain quality control orders—are positive, but India must push for export recovery to prevent a widening gap between high-growth services and a pressured manufacturing base.

(Source: The Print)