Synopsis: India’s GDP for Q2 FY26 is likely to surpass the 7% forecast, driven by robust domestic demand, strong investments, and easing inflation. Despite global disruptions, the Indian economy continues to display resilience and steady growth momentum.
India’s economic trajectory appears promising as the country braces for the release of Q2 GDP numbers by the National Statistical Office (NSO) this Friday. Analysts believe that the Indian economy may outperform the earlier 7% growth forecast for the July–September quarter, even as global uncertainties—such as US tariffs and weakened international demand—loom large.
In the previous quarter (Q1 FY26), India clocked an impressive 7.8% GDP growth, marking a five-quarter high. Experts anticipate another strong performance, driven by domestic factors that continue to fuel economic activity.
India’s macroeconomic outlook remains cautiously optimistic, supported by robust domestic consumption and moderating inflation levels. According to a recent SBI report, the economy is witnessing a boost from increasing investment activities, a revival in rural consumption, and healthy performance across services and manufacturing sectors. The introduction of GST 2.0 reforms is also expected to uplift private consumption and strengthen domestic demand further.
SBI, which tracks 50 leading indicators across agriculture, industry, services, and other sectors, noted a clear acceleration in Q2 FY26. The share of indicators showing growth rose to 83% in Q2, compared to 70% in Q1—reflecting strong economic momentum. Based on its models, SBI has projected a nowcast GDP growth of 7.5–8.0% (GVA: 8.0%) for the quarter.
However, economists caution that certain risks persist. Volatility in global commodity markets and the ripple effects of international trade disruptions could create challenges for India’s growth path. Yet, India’s stable macroeconomic environment provides a supportive foundation for sustained medium-term growth.
Meanwhile, the CareEdge Economic Meter (CEM) showed a growth of 3.2% year-on-year in Q2 FY26, slightly lower than 3.3% in Q1. CareEdge has projected real GDP growth for Q2 FY26 at 7.2%, while forecasting FY26 GDP and GVA growth at 6.9%, and nominal GDP growth at 7.7%, supported by easing inflation trends.
According to their report, rationalisation of income tax slabs, GST rate cuts, strong rural economic activity, cooling inflation, and an expected RBI rate cut will all play crucial roles in shaping growth throughout FY26. Still, global economic uncertainties remain a key factor to monitor closely.
With encouraging signals from multiple economic indicators and improving domestic conditions, India appears well-positioned to maintain its growth momentum, even in the face of global headwinds.
Disclaimer: This article is based on publicly available reports and economic projections. Actual GDP figures may vary depending on official data releases and evolving economic conditions.
