India (Commonwealth Union)_ India’s economy delivered a stronger-than-expected performance in the July–September quarter, expanding 8.2 percent year-on-year. The latest official figures, released recently, show the country navigating global trade tensions and steep US tariffs with surprising resilience, supported by firm consumer demand and a solid pickup in manufacturing. The second-quarter reading marks the fastest pace of growth in a year and a half. It also surpasses both the 7.8 percent expansion seen in the previous quarter and the 5.6 percent growth recorded during the same period in the previous year.
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The result comes as a welcome surprise to many economists. A recent international poll had forecast a more modest 7.3 percent rise for the quarter, especially as it coincided with the start of 50 percent tariffs imposed by the United States on a range of Indian exports. Prime Minister Narendra Modi described the numbers as “very encouraging,” saying they underscore the combined impact of government reforms and the efforts of Indian businesses. In a post on X, he stated that the growth reflects the country’s pro-development policies and the “enterprise of our people,” adding that the government intends to continue improving the ease of living and advancing economic reforms.
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One key factor behind the quarter’s strong showing was the cut in Goods and Services Tax (GST) rates announced by the Prime Minister during his Independence Day address. The revised rates, which came into effect on September 22, prompted many factories to ramp up production ahead of the festive season. The move was part of a wider government strategy to cushion the economy from the impact of high US import duties and to boost domestic consumption. The data suggests that the strategy is showing results. Private consumption, responsible for roughly 57 percent of India’s GDP, rose 7.9 percent in the second quarter. This marks an improvement over the 7 percent expansion seen from April to June, signaling that households continued spending despite global uncertainty.
Manufacturing also turned in an impressive performance. The sector, which contributes 14 percent of India’s total economic output, grew 9.1 percent in the quarter. That is not only higher than the 7.2 percent growth recorded a year earlier but also an improvement over the 7.7 percent reported in the previous quarter. Analysts say stronger factory output, combined with easing input costs, helped lift overall momentum. Government expenditure, however, slipped by 2.7 percent compared with the same quarter a year ago, following a 7.4 percent rise in the April–June period. Even so, officials remain confident about the broader outlook. They expect easing inflation, steady consumer demand, and public investment to help the economy withstand external risks in the months ahead.
Inflation has been on a downward trend, dropping to just 0.25 percent in October. The sharp fall has fuelled expectations that the Reserve Bank of India may consider another interest rate cut in its December policy meeting, which could further support growth. Finance Minister Nirmala Sitharaman said the strong GDP print reflects the government’s long-term focus on reforms and fiscal consolidation. In a message shared on social media, she said high-frequency indicators continue to show healthy economic activity, and India remains the world’s fastest-growing major economy. She credited targeted public investment, productivity-focused reforms, and a more business-friendly environment for the sustained expansion.
Furthermore, economists expect the momentum to continue into the third quarter, helped partly by a low base and the effects of the recent GST reduction. Lower income taxes and earlier cuts in the RBI’s repo rate are also likely to support consumer demand. In another development, the government announced changes to the release schedule of the All India Index of Industrial Production (IIP) for October 2025. Usually published on the 28th of each month, the data will now be released on December 1 at 4 pm, aligning it with the publication of the quarterly GDP estimates.
