With a projected GDP of $7.3 trillion by 2030, India is expected to overtake Germany as the world’s third largest economy in the next two to three years, surpassing Japan with a GDP of $4.18 trillion, according to an official statement released on Monday. With GDP rising to a six-quarter high in Q2 of 2025–2026, the growth momentum again surprised on the upside, demonstrating India’s resiliency in the face of ongoing global trade uncertainty. According to the statement, domestic drivers—led by strong private consumption—were crucial in fostering this increase.
India’s real gross domestic product increased by 8.2% in Q2 FY2025–2026 compared to 7.8% in the previous quarter and 7.4% in Q4 of 2024–2025. This growth was driven by robust local demand in the face of uncertain global trade and policy. The booming manufacturing and services sectors drove an 8.1% increase in real gross value added (GVA).
High-frequency indicators show continued economic activity: export performance is improving, unemployment is dropping, and inflation is still below the lower tolerance barrier. Additionally, the state of the economy has remained stable, with robust credit flows to the business sector.
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