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India's Q2 Growth Hits 7.3% Amid Global Risks, Strong Domestic Demand
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Firstpost•01-10-2026, 12:40
India's Q2 Growth Hits 7.3% Amid Global Risks, Strong Domestic Demand
- •India's economy is projected to grow by 7.3% in Q2 FY27, driven by resilient domestic demand and investment, following a 7.8% expansion in Q1.
- •High-frequency indicators show continued growth into Q2, with services activity strengthening in August despite moderation in e-way bill generation and manufacturing.
- •Robust electricity and fuel consumption, sustained bank credit growth, and strong production of capital and infrastructure goods indicate ongoing investment momentum.
- •India's external sector remains strong, with total merchandise and services exports rising 15.5% year-on-year to USD 399.3 billion during April-August FY27, potentially reaching USD 1 trillion for the full fiscal year.
- •Despite strong domestic performance, global risks like geopolitical tensions, supply chain disruptions, rising crude oil prices, and higher interest rates in developed economies pose challenges to India's growth outlook.
Key Questions Answered
India's economy is expected to grow by 7.3 percent in the second quarter of FY27, driven by resilient domestic demand and investment.
India expanded by 7.8 percent in the first quarter of FY27, which marks the highest first-quarter growth under the current GDP series.
Key risks include geopolitical tensions, global supply chain disruptions, rising crude oil prices, tariff pressures, higher interest rates in developed economies, and potential inflationary pressures from retail price increases.
