India GDP Growth Live: Why RBI may cut rates by 25 bps
Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group says, “India’s real GDP growth for the quarter ending September 2025 came in at 8.2%, well above our projections and ahead of consensus estimates. Growth was broad-based on both GDP and GVA metrics. On the supply side, manufacturing and most service-sector categories registered strong expansion. Demand indicators echoed this trend, with private consumption and investment continuing to demonstrate healthy momentum.
It is important to note that in the GVA-based estimation method, real output is calculated by deflating nominal values. Exceptionally low wholesale price inflation during the period pushed the GDP deflator lower, which may have mechanically boosted real GDP and consequently the reported growth rate. Additionally, the statistical discrepancy component turned positive in Q2 FY26 compared with a negative print in the same quarter last year, further enlarging the GDP level and supporting the headline growth number.
Even after accounting for these technical factors, growth performance in Q2 FY26—and for the first half overall—has been materially stronger than anticipated. With real GDP expanding 8% in H1, full-year growth is now likely to exceed our earlier estimate of 7%, even if activity moderates slightly in the remainder of the year. India is set to retain its position as the fastest-growing major economy globally. Crucially, this period has been marked by high growth accompanied by muted inflation—an indication of the economy’s underlying resilience.
Despite robust growth and a benign inflation environment, we expect the Monetary Policy Committee of the Reserve Bank of India to deliver a 25 bps policy rate cut in the upcoming review. The prevailing macroeconomic configuration—strong output momentum, low inflation, and the prospect of monetary easing—continues to support a favourable outlook for Indian equities.”