NEW DELHI — India’s economy expanded 8.2 percent in the July–September quarter, marking its fastest growth in six quarters and outperforming expectations despite intensified tariff pressures from the United States, according to a new report.
India Narrative said that while the tariffs reduced shipments to the U.S., overall merchandise and services exports still rose 5 to 6 percent during the quarter. The report credited export diversification and policy support for helping India withstand external headwinds.
The report highlighted the role of production-linked incentive schemes, which have drawn new assembly lines for phones, pharmaceuticals, and solar panels. These shifts have helped move India from being a net importer in several categories to an emerging exporter. Factories that once depended heavily on American demand have redirected output to new international markets.
Infrastructure investment also played a key role. The report noted that expanded road networks and a tripling of airports have cut logistics costs, improving competitiveness even in a post-tariff environment. Fiscal discipline, paired with sustained capital expenditure, kept interest rates steady and supported foreign investment flows during a period of global uncertainty.
Although exports to the U.S.—which typically absorbs about one-fifth of India’s shipments—fell by double digits in key months following tariff hikes, overall exports increased. Rising demand from the Gulf, Europe, Africa, and East Asia helped cushion the impact.
India’s real GDP growth surpassed economists’ estimates of 7.9 percent and rebounded sharply from 5.6 percent in the same quarter last year. Nominal GDP grew nearly 9 percent amid easing inflation. Manufacturing expanded more than 9 percent, construction grew above 7 percent, and services sectors such as finance and real estate posted double-digit gains.
Agriculture grew at a modest mid-single-digit pace, a sign that the broader acceleration was powered by manufacturing strength and urban consumption rather than monsoon-dependent farm output.
The report concluded that India’s formerly U.S.-reliant economic model has diversified enough to absorb external pressures. With resilient household demand and a strengthening industrial base, the country now approaches negotiations on digital taxes, trade agreements, and defense ties from a position of greater leverage. (Source: IANS)
