New Delhi, Nov 28: India’s economic momentum strengthened in the second quarter of FY 2025-26, with official data showing robust GDP expansion, easing inflation, higher industrial output and an improvement in labour market indicators. A detailed review released by the government on Friday underlined steady gains across major sectors, supported by policy reforms and resilient domestic demand.
GDP expands in Q2, H1 growth at 8%
Real GDP is estimated to have grown 8.2% in the July–September quarter, up from 5.6% in the same period last year. Growth in the first half of the fiscal year stood at 8%, compared with 6.1% in H1 of FY 2024-25. The primary, secondary and tertiary sectors recorded real GVA growth of 3.1%, 8.1% and 9.2% respectively in Q2, highlighting broad-based expansion. Nominal GDP rose 8.7% in the quarter.
Inflation continues to moderate
Consumer inflation eased sharply to 0.25% in October 2025, the lowest year-on-year rise in the current CPI series. The moderation was driven largely by a decline in food prices, including oils, vegetables, fruits and cereals. Rural inflation fell to –0.25% while urban inflation stood at 0.88%. The wholesale price index showed similar trends, registering –1.21% inflation in October, reflecting softer prices of food items, petroleum, electricity and metals.
Industrial output posts steady rise
India’s index of industrial production grew 4% year-on-year in September, led by a 4.8% increase in manufacturing. Strong gains were recorded in basic metals, electrical equipment and motor vehicles. Use-based data showed double-digit growth in infrastructure and construction goods and consumer durables, signalling durable investment activity and steady consumption.
Employment indicators show improvement
Labour force participation under the weekly status method reached a six-month high of 55.4% in October. Worker participation edged up to 52.5%, while female labour force participation rose to 34.2%. The unemployment rate remained unchanged at 5.2%. EPFO added 21.04 lakh net members in July, a 5.55% rise over the previous year. The Naukri JobSpeak index reported 10.1% growth in white-collar hiring in September, with strong demand in AI-ML roles.
Government schemes support workforce, industry
The government said programmes such as PMKVY, NAVYA, Mudra Yojana, Stand-Up India and Startup India were aiding skill development and entrepreneurship. Manufacturing incentives under the production-linked incentive scheme have attracted over ₹1.76 lakh crore in investments across 14 sectors.
Exports rise 4.84% in april–october
Cumulative exports of goods and services grew 4.84% to USD 491.80 billion in April–October 2025. Merchandise exports grew 0.63%, supported by strong markets including Spain, China, Hong Kong, the US and the UAE. Electronic goods, cashew, marine products, and meat and dairy products were among top-performing categories. Services exports expanded 9.75%.
To support exporters, the government highlighted recent RBI relaxations, credit guarantee schemes, and the Export Promotion Mission.
GST 2.0 rollout boosts consumption
Gross GST collections rose 4.6% year-on-year to ₹1.96 lakh crore in October, coinciding with the implementation of rate rationalisation under the two-slab GST structure. The government said lower rates on essential and labour-intensive sectors were helping reduce costs and widen the tax base.
Global agencies revise India’s outlook upward
The Reserve Bank of India now forecasts 6.8% GDP growth for FY 2025-26. The World Bank, IMF, OECD, Moody’s and S&P have also raised their growth projections for the next two years, citing India’s stable macro-economic conditions and robust domestic demand.
Outlook remains positive
The government said structural reforms, digital expansion and an improving labour market were enabling sustainable growth. With inflation easing, steady consumption and rising investment, officials expect India to maintain its position as the fastest-growing major economy.
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