India’s economy grew 8.2% year-on-year in July-September, accelerating from the 7.8% growth reported in the previous quarter, as strong consumer spending and manufacturing remained key drivers amid global trade uncertainties.

Economists polled by Reuters had forecast a 7.3% expansion for the quarter ended September, a period when the U.S. imposed an additional 25% punitive tariff on Indian exports, raising the total levy to 50%.

Private consumer spending, which accounts for around 57% of GDP, rose 7.9% year-on-year in July-September, compared with a 7.0% rise a quarter ago.

To counter subdued external demand and mitigate the effects of U.S. tariffs tied to its Russian oil purchases, India introduced tax cuts on mass consumption items which kicked-in at the end of September.

Manufacturing output rose 9.1% in the quarter-ended September from a year earlier against growth of 7.7% a quarter ago, while construction expanded 7.2% year-on-year from 7.6% a quarter ago.

Government spending decelerated, declining 2.7% year-on-year in the three months through September as compared to growth of 7.4% in the previous quarter, the data released on Friday showed.

The government expects strong demand, firm public spending and easing inflation to help India weather trade uncertainties and sustain growth through the rest of 2025/26.

Retail inflation in October slumped to a record low of 0.25% in October, raising chances of a rate cut by the Reserve Bank of India in its next review in December.