Gross domestic product rose 8.2 percent year-on-year in the July-September period, the statistics ministry said, the fastest rate in over a year.
The growth was an acceleration from the 7.8 percent recorded in the previous quarter and soared beyond analysts’ forecasts of 7.4 percent.
The latest figures were spurred by higher consumer demand, solid manufacturing sector growth and statistical factors.
Friday’s reading reaffirms India’s position as the fastest growing major economy and will come as welcome news for Indian policymakers grappling with a weak rupee, falling exports and a pivot away from Russian oil imports.
US President Donald Trump has slapped 50 percent tariffs on most Indian products as punishment for New Delhi’s purchases of Russian oil, which Washington claims helps finance Moscow’s invasion of Ukraine.
Indian shipments largely held up between April and August as exporters rushed to beat the tariff clock.
But since then, the tariffs have started to bite, with overall exports falling 11.8 percent year-on-year in October, hurt by a drop in US-bound shipments.
India’s press has reported an imminent trade deal with the United States, but neither side has officially announced a breakthrough.
Meanwhile, the International Monetary Fund recently cut its forecast for India’s next financial year from 6.4 percent to 6.2 percent, citing a “baseline assumption of prolonged 50 percent US tariffs”.
The Global Trade Research Initiative, a New Delhi-based think-tank, estimates that if the harsh tariffs stick, India’s exports could fall to about US$49.6 billion in the current fiscal year — a steep drop from the US$86.5 billion recorded last fiscal cycle.
The world’s fifth-largest economy slowed in the second half of 2024, with annual growth hitting a four-year low in the fiscal year that ended March 31.
While growth has rebounded since then, the drop in activity prompted Indian Prime Minister Narendra Modi to roll out sweeping income and consumption tax cuts.
Modi’s government has since approved US$5 billion in relief measures for exporters and pushed through long-awaited labour law reform in an attempt to woo foreign investment and cut red tape for businesses.