Ziraat Times Team Report
New Delhi, Nov 28: India’s economy expanded by 8.2% in the second quarter (Q2) of FY 2025-26, supported by strong industrial output, easing inflation and improving labour market conditions, according to data released by the Ministry of Finance on Friday. The first half (April–September) recorded 8% real GDP growth, up from 6.1% in the same period last year.
The ministry said the growth momentum reflects broad-based contributions from the primary, secondary and tertiary sectors. Real Gross Value Added (GVA) grew by 3.1% in the primary sector, 8.1% in the secondary sector, and 9.2% in services during Q2.
Inflation Declines Sharply
Consumer inflation eased to 0.25% in October 2025, the lowest year-on-year rate in the current CPI series. Food inflation fell to –5.02%, supported by lower prices of edible oils, vegetables, fruits, eggs and cereals. Rural inflation stood at –0.25%, while urban inflation registered 0.88%, indicating broad moderation.
Wholesale inflation also remained subdued. WPI-based inflation fell to –1.21% in October, with the WPI Food Index dropping to –5.04%.
The ministry noted that the easing price trend aligns with the Reserve Bank of India’s decision to maintain the repo rate at 5.50% with a neutral stance.
Industrial Output Strengthens
Industrial activity showed consistent improvement, with the Index of Industrial Production (IIP) growing 4% year-on-year in September 2025. Manufacturing output expanded by 4.8%, led by sharp growth in basic metals (12.3%), electrical equipment (28.7%) and motor vehicles (14.6%).
Infrastructure goods and consumer durables grew by 10.5% and 10.2%, respectively, pointing to rising investment and consumption.
Government programmes, including the Production Linked Incentive (PLI) Scheme, Skill India initiatives, GST reforms and sectoral missions, continue to support the manufacturing ecosystem, the release said.
Labour Market Indicators Improve
Labour market conditions strengthened during the period. The Labour Force Participation Rate (LFPR) rose to 55.4% in October, a six-month high. The worker participation rate increased to 52.5%, while female labour force participation touched 34.2%, its highest level since May.
The unemployment rate remained unchanged at 5.2%. The Employees’ Provident Fund Organisation (EPFO) added 21.04 lakh net members in July 2025, reflecting higher formal job creation.
The Naukri JobSpeak Index recorded 10.1% year-on-year growth in September, driven by a surge in hiring for artificial intelligence and machine learning roles.
Exports Record Moderate Growth
India’s cumulative exports of goods and services grew 4.84% in April–October 2025**, touching USD 491.80 billion. Merchandise exports rose 0.63% to USD 254.25 billion despite global headwinds, supported by higher shipments of marine products, cereals, cashews and electronic goods.
Service exports grew 9.75% to USD 237.55 billion, aided by strong performance in computer and business services.
The government said recent measures—including extended timelines for export realisation, credit guarantee schemes for exporters, and the Export Promotion Mission—are intended to support trade growth and market diversification.
GST Collections Rise
Gross GST collections for October stood at ₹1.96 lakh crore, up 4.6% from last year. The increase coincided with the rollout of GST 2.0, which introduced a simplified two-slab structure and rate reductions in several sectors.
Growth Outlook Upgraded
Multiple domestic and international institutions have revised India’s growth forecasts upward.
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The RBI now projects 6.8% growth for FY 2025-26.
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The World Bank expects 6.5% growth in 2026.
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The IMF forecasts 6.6% in 2025 and 6.2% in 2026.
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Moody’s, OECD and S&P have also revised projections in the range of 6.2% to 6.7% over the next two years.
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