India’s Economy Skyrockets 8.2% in Q2 FY26: Manufacturing And Services Power The Surge

India’s Economy Accelerates To 8.2% in Q2 FY26, SBI Says Growth Momentum Strong

India’s economy continued its upward trajectory in Q2 FY26, recording 8.2 per cent growth, the highest in six quarters, according to the latest SBI Research Ecowrap report. The study projects overall GDP expansion at 7.6 per cent for FY26, supported by strong domestic demand and robust performance in manufacturing and services. India’s nominal GDP is also expected to touch USD 4.1 trillion by the end of the fiscal year.

Manufacturing And Services Lead Growth Revival

The report highlights an encouraging shift in the economy’s structure. Nominal GDP grew 8.7 per cent in Q2, while the gap between nominal and real GDP narrowed sharply to 0.5 percentage points. Core GVA (excluding agriculture and public administration) rose 8.5 per cent compared to 5.6 per cent last year.
Manufacturing surged 9.1 per cent, services expanded 9.2 per cent, and industry grew 7.7 per cent. Agriculture posted a steady 3.5 per cent rise.

Domestic Demand Strengthens; Consumption & Investment Rise

Private consumption grew 7.9 per cent, reflecting stable household spending, while capital formation increased 7.3 per cent. Higher imports of capital goods, chemicals, and rare earth materials suggest rising investment activity. Meanwhile, a contraction in gold purchases indicates a shift from non-productive to growth-oriented spending.

MSME Credit Boom Signals Deepening Economic Activity

One of the report’s most notable findings is the unprecedented expansion in MSME credit. Between FY2009 and FY2025, incremental MSME lending averaged Rs 1.17 lakh crore annually. In just the first seven months of FY26, the figure has already reached Rs 3.74 lakh crore. At the current pace, incremental MSME credit could hit Rs 6.4 lakh crore by year-end—5.5 times the long-term average.
The surge indicates a broader and deeper growth base, with small and medium enterprises emerging as major drivers of economic momentum.

With inflation staying low and credit demand rising, SBI Research believes the RBI may concentrate on steering rate expectations while maintaining a neutral stance in its upcoming policy review. The report concludes that with India on track to cross USD 4 trillion GDP by March 2026, the country is well-positioned to achieve the USD 5 trillion milestone by March 2029.

(This news has been syndicated from ANI, Mildy edited for clarity)

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