By Pradeep Bhandari
India’s Q2 FY 2025–26 GDP print of 8.2% is not just another quarterly statistic—it is a macroeconomic statement. It marks a decisive departure from the growth volatility of the past decade and establishes India as the world’s fastest-growing major economy in a global environment marked by slowdown and fragmentation. For H1 FY26, real GDP growth averaged 8%, compared to 6.1% in the same period last year, underscoring the depth of the current expansion. This acceleration is happening at a time when global growth is hovering around 3%, G7 economies are slowing below 1.5%, and China is struggling to hold the 4–5% range. India, meanwhile, is widening the gap.
A significant share of this momentum is rooted in the long-horizon economic strategy championed by Prime Minister Narendra Modi. Over the past decade, reforms such as GST, Insolvency & Bankruptcy Code (IBC), the Production Linked Incentive (PLI) scheme, massive digitalisation, and labour-skilling programs have structurally altered India’s economic base. Modi’s emphasis on manufacturing competitiveness, export diversification, and a technology-led economy is now yielding quantifiable macroeconomic dividends. The latest numbers reflect not just cyclical recovery but the payoff from sustained policy consistency and national-scale capacity building.
What distinguishes this growth cycle is its sectoral breadth. The primary sector grew 3.1%, supported by strong agricultural output and rural price relief. The secondary sector expanded 8.1%, driven by manufacturing and construction, while services surged 9.2%, powered by financial services, digital business services, tourism, logistics, and telecom. These three engines operating together create a multiplier effect that strengthens employment, consumption, investment demand, and tax buoyancy. India’s growth is not narrow or one-dimensional; it is layered, diversified, and increasingly self-sustaining.
The inflation environment further strengthens the macroeconomic narrative. CPI inflation dropped to 0.25% in October 2025, the lowest in the current CPI series and a full 119 basis points lower than September’s print of 1.44%. Food inflation plunged to –5.02%, helped by easing prices of cereals, vegetables, oils, and eggs. Rural inflation is now –0.25%, while urban inflation remains contained at 0.88%. Wholesale inflation echoed this moderation, coming in at –1.21% year-on-year, with the WPI food index dropping to –5.04%. For households, this means rising real purchasing power; for firms, it means lower input costs; and for policymakers, it opens fiscal and monetary space to support growth without triggering overheating.
On the industrial front, activity is gaining steady traction. The Index of Industrial Production (IIP) grew 4% year-on-year in September 2025, driven by 4.8% manufacturing growth. Key industries delivered impressive numbers: basic metals surged 12.3%, electrical equipment soared 28.7%, and motor vehicles and trailers grew 14.6%. When broken down by use-based classification, infrastructure and construction goods expanded 10.5%, consumer durables by 10.2%, and intermediate goods by 5.3%. These figures point to a strong investment cycle and rising household discretionary spending, both essential for sustaining medium-term momentum.
Government-backed manufacturing expansion is also visible in investment flows. The PLI scheme, covering 14 strategic sectors from electronics to pharmaceuticals to advanced automotive components, has already attracted ₹1.76 lakh crore in investments out of an approved outlay of ₹1.97 lakh crore. This 89% utilisation reflects high industry confidence and signals the emergence of India as a credible global manufacturing alternative. Combined with Skill India training over 27 lakh youth, Mudra loans sanctioned exceeding ₹4.91 lakh crore, and 200,000+ DPIIT-recognised startups, India’s supply-side ecosystem is being systematically broadened.
The labour market story is equally encouraging. The Labour Force Participation Rate reached 55.4%, the highest in six months. Female LFPR climbed to 34.2%, a critical indicator of inclusive growth. The Worker Participation Rate (WPR) stands at 52.5%, and unemployment remains stable at 5.2%. EPFO data shows 21.04 lakh net members added in July 2025, a 5.55% rise over last year, highlighting deeper formalisation and rising payroll jobs. Meanwhile, the Naukri JobSpeak Index recorded 10.1% hiring growth, with AI and ML roles skyrocketing 61%, confirming India’s position as a rapidly upskilling digital workforce.
Despite global trade disruptions, India’s export engine continues to hum. Cumulative exports for April–October 2025 stood at USD 491.80 billion, up 4.84% year-on-year. Merchandise exports alone reached USD 254.25 billion, growing 0.63%, supported by strong demand from Spain (+40.74%), China (+24.77%), Hong Kong (+20.7%), the US (+10.15%), and the UAE (+5.88%). High-performing segments included electronic goods (+37.82%), cashew (+28.32%), other cereals (+25.52%), and meat & dairy (+23.97%). Meanwhile, services exports surged 9.75%, reaching USD 237.55 billion. These numbers affirm that India’s external sector resilience is structural, not episodic.
GST 2.0 reform has added further buoyancy. Simplified rate slabs of 5% and 18% have reduced compliance complexity and cut costs for households and businesses. Yet, despite rate rationalisation, GST collections touched ₹1.96 lakh crore in October 2025—a 4.6% increase over last year. This reflects both stronger consumption and improved tax administration.
International institutions have taken note. The RBI has revised India’s FY26 GDP projection from 6.5% to 6.8%.
The IMF expects 6.6% growth in 2025, the OECD pegs it at 6.7%, the World Bank at 6.5%, and S&P forecasts 6.5% in FY26 rising to 6.7% in FY27. These upgrades reflect global recognition of India’s reform-backed resilience.
For years, sceptics—both domestic and foreign—dismissed India as a “dead economy,” incapable of sustaining high growth or executing complex reforms. The latest data leaves little room for such fatalistic narratives. Today’s India is expanding rapidly, moderating inflation effectively, formalising its workforce, attracting industrial investment, and strengthening its export competitiveness. It is doing all this while building the capacity to become the world’s third-largest economy soon, a milestone now well within reach.
The numbers are clear. The trajectory is clear. India is not just growing—it is powering ahead with confidence and purpose. And as these macroeconomic indicators show, PM Modi’s vision of India as an economic superpower is no longer aspirational rhetoric; it is unfolding in real time, in data, and in measurable national capacity.
(Pradeep Bhandari is BJP National Spokesperson) | Views are personal and do not represent the stand of this publication)
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
