India's Booming Economy: Surging Growth Amid Tariff Challenges

India's economy grew by 8.2% year-on-year in July-September, driven by strong consumer spending and a production boost before local festivals and U.S. tariffs. The growth exceeded economists' forecasts, with private spending and exports leading the way. The government expects sustained growth through robust demand and public spending.

India's economic growth surged to an impressive 8.2% year-on-year in the July-September quarter, fueled by robust consumer spending and a strategic increase in production ahead of local festivals and punitive U.S. tariffs. The expansion surpassed the 7.3% forecasted by economists polled by Reuters, with the GDP having grown by 7.8% in the preceding quarter.

Private consumer spending, which constitutes an estimated 57% of GDP, rose by 7.9% year-on-year, up from a 7% rise in the previous quarter. To counter subdued external demand and mitigate adverse effects from U.S. tariffs linked to Russian oil purchases, India implemented tax cuts on mass consumption items late in September.

In response to the stellar GDP performance, economists are optimistic about full-year GDP growth for FY26 reaching close to 7.5%. The government attributes the quarterly success to stockpiling for the festive season and expedited exports ahead of the tariff deadline. Manufacturing and construction sectors showed notable growth, while government spending saw a decline.

(With inputs from agencies.)