India remains fastest growing economy with 8.2 per cent GDP surge amid global slowdown

New Delhi: India has consolidated its position as the world's fastest-growing large economy with the GDP growth rate surging to 8.2 per cent in the July-Sept quarter, while the world faces the headwinds of uncertainty and slowing growth. 

Amidst this global deceleration, India stands as a resolute outlier, propelled by the tailwinds of domestic demand, investment, and policy stability.

This is not a one-quarter phenomenon as the 8.2 per cent surge comes on the back of a robust 7.8 per cent growth in the first quarter to average 8 per cent GDP growth for the first half of 2025-26.

With a continued GDP growth of 8.2 per cent in the second quarter, India is expanding at nearly double the rate of the US (3.8 per cent) and over 20 times the rate of Germany.

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Data for the July-September 2025 quarter reveals a grim picture for traditional powerhouses struggling to find momentum:

-- Germany barely grew at 0.3 per cent, acting as a significant drag on the wider Euro Area (1.4 per cent).

-- France (0.9 per cent), Japan (1.10 per cent), and the UK (1.3 per cent) remain trapped in a low-growth cycle, grappling with the lagged effects of monetary tightening.

-- Even other key emerging markets like China (4.8 per cent), Indonesia (5.04 per cent), and Malaysia (5.2 per cent) are trailing significantly behind India's trajectory.

With GDP growth at 8.2 per cent, inflation anchored at historic lows, and robust external buffers, the Indian economy has managed to decouple from the global slowdown.

Fiscal and monetary measures, particularly the GST rationalisation, spurred growth 

The fiscal and monetary measures undertaken, particularly the GST rationalisation, have paved the way for a virtuous cycle of investment and consumption, positioning India as a rare bright spot in the global economic landscape.

IMF Managing Director Kristalina Georgieva recently validated this trajectory, stating: "I'm very big on India because of the boldness of their reforms... India has proven the naysayers wrong."

This structural resilience has triggered a wave of global recognition, marked by 3 sovereign credit rating upgrades in the last six months: Morningstar DBRS upgraded to ‘BBB’ (May 2025), S&P upgraded to ‘BBB’ (August 2025) – a historic move after 18 years, and R&I (Japan) upgraded to ‘BBB+’ (September 2025).

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These upgrades are a decisive vote of confidence in India’s fiscal consolidation, infrastructure push, and banking health. They signal to long-term institutional investors that India’s growth is durable, making it a pivotal destination for global capital in an uncertain world.

According to an official statement, the production engine of the Indian economy is firing on all cylinders, evidenced by robust expansion in both manufacturing and infrastructure sectors. The Manufacturing Purchasing Managers’ Index (PMI) accelerated to 59.2 in October 2025, up from 57.5 in September, indicating a sharp expansion in output and new orders driven by productivity enhancements and technology investments. This vitality is further reflected in the Index of Industrial Production (IIP), which registered a cumulative growth of 3 per cent for the April-September period. This industrial momentum is translating directly into healthy corporate balance sheets.

The rural economy is being buoyed by favourable agricultural incomes

Crucially, this supply-side strength is matched by a broad-based recovery in demand that spans both urban and rural landscapes. The rural economy is being buoyed by favourable agricultural incomes. Tractor sales in October 2025 reached the highest level for any month in the past eleven years, while retail two-wheeler sales recorded a sharp growth of 51.8 per cent, reflecting the surge in rural demand.

Urban demand is witnessing a revival, particularly in smaller cities. Automobile retail sales grew by 40.5 per cent year-on-year in October 2025, with both passenger vehicles and two-wheelers recording lifetime highs.

A standout achievement for the economy has been the management of price pressures, which has preserved the purchasing power of the common citizen.

This price stability is underpinned by a robust agricultural outlook. The sowing of Rabi crops has gained significant momentum, covering 22.97 million hectares by November 21, an increase of 14.8 per cent compared to the previous year. This is supported by healthy reservoir levels and a 12.7 per cent growth in fertiliser sales during the April-June period, ensuring food security and stabilising future inflation expectations.

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Despite elevated global trade policy uncertainty, India’s external sector remains a pillar of strength. Services exports achieved their highest-ever monthly level of $38.5 billion in October, registering an 11.9 per cent growth. This services surplus covered nearly 48 per cent of the merchandise trade deficit, keeping the current account manageable.

Investor confidence remains high, with Net Foreign Direct Investment (FDI) surging to $7.6 billion in April-September FY26, a massive jump from $3.4 billion the previous year. Consequently, India’s foreign exchange reserves stood at a formidable $687 billion in October, providing an import cover of roughly 11 months and acting as a substantial buffer against external shocks, the statement added.

(IANS)