India’s economy expanded at a six-quarter high of 8.2% in Q2 FY26 (July–September), surpassing estimates and the previous quarter’s 7.8% growth, the government announced on November 28, 2025.
The growth was driven by a robust manufacturing sector (+9.1%) and a buoyant services sector (+10.2%), especially financial, real estate, and professional services. Private consumption strengthened to 7.9%, signaling healthy domestic demand.
Economists noted the GDP numbers beat expectations, with a Moneycontrol poll forecasting 7.3% and the Reserve Bank of India projecting 7%.
“The sharp pickup in manufacturing and continued resilience in services highlight India’s broad-based growth and strong domestic fundamentals,” said Mahendra Patil, Founder and Managing Partner, MP Financial Advisory Services LLP.
Market Reaction
Indian equity markets closed almost flat on November 28 after recent record highs:
- Sensex: 85,706.67 (-14 points, -0.02%)
- Nifty 50: 26,202.95 (-13 points, -0.05%)
Analysts expect positive market momentum when trading resumes:
- Kranthi Bathini, WealthMills Securities: Nifty 50 may cross the 26,250 resistance level, reflecting strong GDP-driven market resilience.
- Anirudh Garg, INVasset PMS: Data validates earnings strength, supports valuations, and underscores domestic growth drivers.
Implications for Monetary Policy
While most experts anticipate a RBI rate cut in December, strong GDP growth could temper aggressive easing, especially in rate-sensitive segments. Analysts suggest the MPC may emphasize forward-looking growth guidance and maintain a high real rate buffer due to low inflation.
“Overall, the growth data supports the medium-term equity narrative: corporate earnings remain backed by real activity, and the investment cycle is expanding rather than peaking,” said Garg.