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India GDP September Quarter: India’s economy recorded stronger-than-expected momentum in the quarter ending September, growing at an annual rate of 8.2%.
The result marks a clear improvement from the 7.8% expansion reported in the previous quarter.
Analysts said the earlier quarter’s performance was influenced by an unexpectedly low deflator, the measure used to account for inflation when calculating total economic output.
The latest data also reflects resilience during a period partly shaped by newly implemented 50% U.S. tariffs, which had raised concerns about possible headwinds for trade and production.
A Reuters survey of economists had projected India’s GDP growth at 7.3% for the July–September period.
New data shows the economy performed more strongly than that forecast.
Nominal GDP, which reflects total output without adjusting for price changes, rose 8.7% in the September quarter. The pace was only marginally below the 8.8% expansion reported in the previous quarter.
India’s economic momentum strengthened in the July–September quarter, supported by a rebound in manufacturing, rising construction activity, and firm domestic demand.
In a statement, the government reported that financial, real estate, and professional services recorded strong growth of 10.2% during the period. Despite the broader uptick, consumer spending showed signs of restraint.
Neelkanth Mishra, chief economist at Axis Bank, told CNBC’s “Inside India” ahead of the data release that many households held back on purchases in anticipation of upcoming goods and services tax cuts.
The United States imposed 50% tariffs on Indian exports in August, prompting New Delhi to roll out widespread cuts to goods and services tax rates on September 22 to help absorb the impact.
The tax relief quickly lifted demand. By October, consumer spending had surged, with auto and gold sales hitting record levels as GST reductions and earlier income tax cuts increased household purchasing power.
Still, the nation’s goods trade deficit climbed to a new peak, weighed down by weak exports and a rise in gold imports.
The International Monetary Fund reported Wednesday that India’s real GDP is likely to grow 6.6% in fiscal year 2026.
It expects growth to slow to 6.2% in fiscal 2027, assuming continued delays in reaching a U.S.–India trade agreement.
The IMF also warned of pressure on India’s external sector.
It projects merchandise exports to drop 5.8% in fiscal 2026 to $416 billion, while goods imports are expected to increase 2.4% to $746 billion.
The outlook points to a widening trade imbalance if current conditions persist.
“Despite external headwinds, India’s growth is expected to stay strong, supported by stable domestic conditions,” the IMF said in its statement.
The agency’s latest projections also show India on course to reach a $5 trillion economy by fiscal year 2029.
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