India’s economy has done what was not even expected. India’s GDP growth rate in the second quarter of 2025-26 i.e. July to September was 8.2%. This was much more than expected. The GDP growth rate in the second quarter was expected to be 7 to 7.3%. This shows that India is still the fastest growing economy in the world.
This is the highest growth rate in the last 6 quarters. Earlier, the growth rate in the first quarter i.e. April to June was 7.8%. The last time growth of more than 8% was recorded in the fourth quarter of 2023-24. Then the GDP growth rate was 8.4%.
These GDP figures are also special because US President Donald Trump had imposed 50% tariff on India, which has been in effect since August. It was believed that this might slow down the pace of the economy but its effect was not visible in this quarter.
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How was the economy? Understand in 3 points
- Growth Rate: The economy grew at 8.2% in the 2025-26 quarter. This growth rate in the last quarter was 7.8%. In the second quarter of 2024-25 it was 5.6%.
- Size of Economy: The size of GDP at constant prices in the second quarter is Rs 48.63 lakh crore. In the second quarter of 2024-25 it was Rs 44.94 lakh crore.
- What will happen next: Chief Economic Advisor V Anantha Nageswaran The GDP growth rate in the 6 months of 2025-26 has been more than 8%, so the estimate for the entire year is 7% or more.
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Why such a high growth rate?
There are many reasons for such a boom in the economy. However, the biggest reason for this is considered to be the reduction in GST. The new GST rates have come into effect from September 22. Due to the cut in GST, inflation rate was also lower in the second quarter as compared to the first quarter. Due to this people spent freely.
Prime Minister Narendra Modi described GDP growth as ‘very encouraging’. “This shows the impact of our growth-promoting policies and reforms,” he said in a post on X. It also shows the hard work and courage of our people. Our government will continue to pursue reforms and strengthen the ease of living for every citizen.
After the cut in GST, there are only two slabs – 5% and 12%. Many things on which GST was earlier levied have also been abolished. The effect of this was that there was a lot of shopping during the festive season.
The effect of this cut has been seen in the GDP figures. The share of private consumption i.e. consumer spending in GDP is about 57%. Private consumption grew 7.9% in the July-September quarter. Its growth rate in the April-June quarter was 7%.
Similarly, manufacturing output has increased by 9.1%, whereas it had increased by 7.7% in the previous quarter. However, construction has declined. The growth rate of construction in the first quarter was 7.6%, which decreased slightly to 7.2% in the second quarter.
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Why was the impact of the tariff not visible?
Citing oil purchases from Russia, US President Donald Trump had earlier imposed a 25% tariff on Indian imports. After this he further increased the tariff by 25%. In this way, Indian imports going to America now attract 50% higher tariff.
Trump’s tariffs were supposed to be a big blow to the Indian economy but the opposite happened. Due to tariffs, instead of being normal, the GDP growth rate crossed 8%.
Now the question arises why the effect of Trump’s tariffs was not visible? So the reason for this is that Trump’s tariffs came into effect in August and the figures are from July to September. Experts say that before the implementation of the tariff, a lot of goods had been loaded for export.
Madhavi Arora, chief economist of Mumbai-based MK Global Financial Services, told news agency Reuters that the impact of most factors can be seen in the third quarter, but the annual growth rate is still expected to be more than 7%.
Not only this, the data from April to August of 2025-26 also shows that America’s share in India’s exports has also increased. According to Commerce Ministry data, India exported Rs 3.47 lakh crore to America from April to August in 2025-26. Of the exports that India exported during this period, about 22 percent was to America only. Whereas, before this, America’s share in India’s exports in 2024-25 was less than 20 percent.
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America itself is suffering losses!
America is suffering losses due to Trump’s tariffs. Due to tariffs, the GDP growth rate has been reduced by 0.5% in July-September.
Not only this, due to tariffs the unemployment rate in America has increased by 0.3%. During this period approximately 5 lakh jobs have been lost. According to statistics, the American economy has suffered a loss of $125 billion due to this.
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