 "Employees assemble different parts onto a car panel at the manufacturing plant of Maruti Suzuki in Manesar, Haryana, India, on September 26, 2023. (Photo: Reuters)")
India beat expectations to grow at 8.2 per cent in the July-September quarter on the back of strong manufacturing and services sector, according to official government data released on Friday.
A poll by CNBC-TV 18 had projected the quarterly growth at 7.4 per cent.
But the economy grew more than expected on the back of strong secondary (8.1 per cent) and tertiary (9.2 per cent) sectors’ growth. This is the fastest growth in six quarters.
In a post on X, Prime Minister Narendra Modi hailed the quarterly growth as a reflection of “hard work and enterprise of our people” and appreciated the government’s reforms.
In the secondary sector, manufacturing grew at 9.1 per cent and construction at 7.2 per cent. In the tertiary sector, financial, real estate, and professional services (10.2 per cent) sustained a substantial growth rate.
The strong economic growth could fuel annual growth to 7.5 per cent, which would be above the government and Reserve Bank’s projections, according to Garima Kapoor, Deputy Head of Research and Economist at Elara Capital.
Kapoor told CNBC TV-18, “The blockbuster GDP growth has been led by front-loading of exports along with strong government spending, especially capex, amid a supportive base effect. With today’s print, full-year FY26 GDP growth will now see an upside and will be close to 7.5 per cent — way above RBI’s and government’s estimate.”
Notably, the strong growth has been reported in the midst of American tariffs — India faces 50 per cent American tariffs, the highest in the world.
Irrespective of India frontloading shipments in the wake of tariffs and other technical measures that could have frontloaded economic activity, India has had a good year and is expected to be the fastest-growing major economy.
“Even after accounting for these technical factors, growth performance in Q2 FY26—and for the first half overall—has been materially stronger than anticipated. With real GDP expanding 8 per cent in H1 [first half], full-year growth is now likely to exceed our earlier estimate of 7 per cent, even if activity moderates slightly in the remainder of the year. India is set to retain its position as the fastest-growing major economy globally,” said Sujan Hajra, the Chief Economist and Executive Director of Anand Rathi Group, told CNBC-TC 18.