Amid global economic uncertainties, high US tariffs, and international market volatility, the Indian economy continues to surge ahead. According to the latest estimates from rating agency India Ratings and Research (Ind-Ra), India’s GDP is expected to grow at a rate of 7.2% in the second quarter (July-September) of the financial year 2025-26.
The agency highlights that the primary engine for this growth will be private consumption. This projection comes on the heels of a strong 7.8% growth in the first quarter (April-June) of FY25, which was the fastest in five quarters.
Key Drivers of Growth
Ind-Ra expects the GDP growth rate to remain strong at 7.2% year-on-year for Q2 FY25-26. Paras Jasrai, Economist and Executive Director at India Ratings, stated that a significant uptick in private consumption is the main catalyst. He pointed to improved real incomes for both high and low-income groups as a key factor boosting demand.
This growth is further supported by:
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A robust infrastructure sector.
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An increase in goods and services exports.
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Continued strength in the services sector.
Private Consumption and Investment on the Rise
The rating agency forecasts an 8% growth in private consumption for Q2 FY25-26. This is a notable jump from 7% in Q1 and 6.4% in Q2 of the previous fiscal year. The income tax cuts announced in the Union Budget have also contributed to this demand surge.
Furthermore, investment demand is projected to have grown at a healthy rate of 7.5% year-on-year in the second quarter, with government capital expenditure playing a pivotal role.
The National Statistical Office (NSO) is scheduled to release the official GDP figures for Q2 FY26 on November 28, 2025. If the projections hold true, it would mark one of the strongest growth rates for the Indian economy in the last five quarters, underscoring its resilience in a challenging global environment.
