Indian economy remains world's fastest growing despite US tariffs
GST
Dated:- 28-11-2025
PTI
New Delhi, Nov 28 (PTI) India's economy grew at a higher-than-expected 8.2 per cent – the fastest pace in six quarters – in July-September, as front-loading of production ahead of GST rates cut boosted consumption that helped offset the impact of steep US tariffs.
The 8.2 per cent gross domestic product (GDP) growth, which follows a 7.8 per cent expansion in the preceding April-June quarter, helped India retain the title of the world's fastest growing major economy, according to official data released on Friday.
The GDP growth came ahead of the festive season consumption boost on the back of the implementation of a significant reduction in the goods and services tax (GST). It, however, does not factor in the full quarter impact of an additional 25 per cent punitive tariff on Indian exports that took the total levy to 50 per cent in August.
The expansion, which was more than China
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fect on September 22.
Private consumer spending, which accounts for around 57 per cent of GDP, rose 7.9 per cent in July-September – the second quarter of the current 2025-26 fiscal – compared to a 7 per cent rise a quarter ago, according to data released by the National Statistics Office (NSO).
Manufacturing output rose 9.1 per cent against a growth of 7.7 per cent in the preceding quarter and 7.6 per cent in the year-ago period, while construction expanded 7.2 per cent from 7.6 per cent in the previous quarter. Government spending decelerated, declining 2.7 per cent in Q2, compared to a growth of 7.4 per cent in the previous quarter.
Finance Minister Nirmala Sitharaman said the GDP print shows that reforms and fiscal consolidation drove the Indian economy's robust growth and momentum.
“Various high-frequency indicators also point to continued economic momentum and broad-based consumption growth,” she said in a social media post. “The GDP estimates released today show the robust e
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arter (October-December) of the current fiscal year has commenced on a sound footing, he pointed out.
Further, the rural demand remains resilient while urban demand is gaining traction post-GST rate cut.
While the real GDP growth at 8.2 per cent in the second quarter exceeded expectations, the nominal print was modest at 8.7 per cent.
The difference between real and nominal is the smallest since the third quarter of fiscal 2020.
The third quarter is expected to continue benefiting from a low base and deflator. Also, aiding is the GST rate cut that bolstered private consumption, complementing reduced income tax and interest rates cuts because of the RBI repo rate reductions.
Dharmakirti Joshi, Chief Economist, Crisil Ltd, said the GDP series is getting revised to a new base of 2022-23 from 2011-12, which will capture the economy better, but can lead to deviation from current estimates.
DBS Bank economist Radhika Rao said the impact of deflator and low base was also reflected in th
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