India’s Q2 GDP Likely To Grow 7.2%, Says Ind-Ra

India Ratings & Research (Ind-Ra) has projected India’s gross domestic product (GDP) to expand by 7.2 per cent in the second quarter (July–September) of FY26, supported by strong private consumption and a resilient services sector. The Indian economy had grown 5.6 per cent in the same quarter last year and 7.8 per cent in the April–June period of FY26 — the fastest pace in five quarters. The National Statistical Office (NSO) will release the official GDP figures for Q2 FY26 on 28 November. “From the demand side, private consumption is a leading growth driver due to steady real income growth both in upper- and lower-income households,” Ind-Ra said in its latest assessment. According to Paras Jasrai, Economist & Associate Director at Ind-Ra, “The resilient services sector along with favourable base-led goods exports growth in the manufacturing sector propelled GDP growth from the supply side during Q2 FY26.” The report said India’s economy has weathered global headwinds better than expected, thanks to robust domestic demand. Retail inflation has also eased faster than projected by both Ind-Ra and the Reserve Bank of India (RBI), supporting real wages and boosting consumption. However, the agency cautioned that nominal GDP growth may have slipped below 8 per cent year-on-year in Q2, which could impact the Centre’s tax collections. “Real GDP growth looks stronger as lower input costs have provided some succour to growth momentum, despite heightened global uncertainty and volatility. Nevertheless, continued weakening nominal GDP growth would be of greater concern as it may complicate the fiscal arithmetic,” Ind-Ra said. Private consumption is estimated to have risen 8 per cent year-on-year in Q2 FY26, compared to 7 per cent in Q1 and 6.4 per cent in Q2 FY25. The report attributed this to a favourable base effect, record low inflation, and steady rural wage growth. “The consumption demand was also supported by income tax cuts announced in the FY26 Budget. Private consumption would have grown even faster had there been no deferral of buying decisions following the GST rate rationalisation,” Ind-Ra noted. On the investment front, demand rose 7.5 per cent year-on-year during the quarter, aided by steady government capital expenditure, which helped sustain momentum amid global uncertainty. Ind-Ra said the outlook for the remainder of the fiscal remains positive, with macroeconomic stability and policy support likely to keep India among the world’s fastest-growing major economies.