Q2 GDP at 8.2%: Deepak Shenoy breaks down India’s strengths and hidden weak spots
Shenoy highlighted that “the biggest in the economy are financial services, trade and manufacturing. The rest are relatively small.”
- Dec 1, 2025,
- Updated Dec 1, 2025 3:15 PM IST
India’s latest GDP print offers a mixed picture of strength and caution. While the economy continues to clock a strong 8.2% real GDP growth, the nominal GDP growth of 8.73% is “a little too low,” according to Deepak Shenoy, CEO of Capitalmind AMC, who unpacked the numbers in a series of detailed posts on X.
Shenoy’s breakdown comes as multiple sectoral and component-level datasets from MOSPI illustrate how different engines of the economy are performing — and what that means for India’s trajectory toward the $4-trillion milestone.
Manufacturing & Financial services outperform
The sectoral charts show a clear outlier:
- Manufacturing grew 9.1% in the latest quarter — its best performance in recent cycles.
- Financial services also surged, touching 10.2%, cementing their position as one of the biggest contributors to India’s economic structure.
- Trade and Transport, another heavyweight, posted robust mid-to-high single-digit growth across quarters.
- Personal services, though historically strong, saw some softening in growth momentum.
Shenoy highlighted that “the biggest in the economy are financial services, trade and manufacturing. The rest are relatively small.” The composition chart reinforces this dominance: financial services and trade/transport consistently occupy a growing share of GDP over the last five years.
Consumption & Investments hold strong
One of the most important takeaways from Shenoy’s analysis is the strength of domestic demand:
- Private consumption, which forms 55% of India’s GDP, grew at about 8% — a “decent” rate, he noted.
- Investments, contributing 34% of GDP, also posted healthy growth, crossing 7% in year-on-year terms.
Exports, however, showed weaker momentum compared to imports, and inventories saw a sharp contraction of 11.5% — a sign that demand is outpacing stock accumulation or that businesses are cautious about overstocking.
Government expenditure, meanwhile, remained muted and even contracted in the latest quarter.
India at ₹345 lakh crore, still shy of $4 trillion
The trailing twelve-month GDP chart shows India continuing its steady post-pandemic climb, reaching ₹345 lakh crore at market prices.
Shenoy noted:
- At ₹345 lakh crore, with the exchange rate at ₹89.7 per dollar, GDP works out to just under $3.5 trillion.
- After correcting earlier calculations, he added: “We are at $3.84 trillion… still short a little of the $4 trillion mark.”
The $4-trillion threshold, frequently cited in political and media narratives, remains within reach but not yet achieved.
Real vs Nominal: A point of concern
A significant insight comes from the real-versus-nominal growth trend. Historically, nominal GDP grew several percentage points faster due to inflation and pricing effects. But the latest numbers show nominal growth of just 8.73%, barely above real growth at 8.2%.
Shenoy flagged this gap, calling nominal “a little too low” — a sign of subdued price growth or tightening conditions in certain sectors.
Bigger economic picture
From the composition chart, India’s GDP remains heavily service-driven, with: Financial Services, Trade & Transport, Manufacturing, together forming the backbone of economic activity.
Agriculture and mining remain relatively small contributors, though agriculture shows stable moderate growth, while mining has been volatile.
Shenoy’s analysis points toward an economy that is:
- growing rapidly in real terms,
- shifting structurally toward services and manufacturing,
- driven primarily by consumption and investment,
- but facing pressures on pricing, exports, and inventory buildup.
India’s economy expanded at 8.2% in the July-September quarter, marking the fastest growth in six quarters, as manufacturing output picked up pace ahead of an expected demand uptick following the GST rate cut, according to official data.
The latest GDP print outpaced the 7.8% growth recorded in the previous quarter and sharply improved from 5.6% in the same period last year. Manufacturing — which accounts for about 14% of the country’s GDP — surged 9.1% in Q2, a significant jump from the 2.2% growth seen in the corresponding quarter of the previous financial year.
India’s latest GDP print offers a mixed picture of strength and caution. While the economy continues to clock a strong 8.2% real GDP growth, the nominal GDP growth of 8.73% is “a little too low,” according to Deepak Shenoy, CEO of Capitalmind AMC, who unpacked the numbers in a series of detailed posts on X.
Shenoy’s breakdown comes as multiple sectoral and component-level datasets from MOSPI illustrate how different engines of the economy are performing — and what that means for India’s trajectory toward the $4-trillion milestone.
Manufacturing & Financial services outperform
The sectoral charts show a clear outlier:
- Manufacturing grew 9.1% in the latest quarter — its best performance in recent cycles.
- Financial services also surged, touching 10.2%, cementing their position as one of the biggest contributors to India’s economic structure.
- Trade and Transport, another heavyweight, posted robust mid-to-high single-digit growth across quarters.
- Personal services, though historically strong, saw some softening in growth momentum.
Shenoy highlighted that “the biggest in the economy are financial services, trade and manufacturing. The rest are relatively small.” The composition chart reinforces this dominance: financial services and trade/transport consistently occupy a growing share of GDP over the last five years.
Consumption & Investments hold strong
One of the most important takeaways from Shenoy’s analysis is the strength of domestic demand:
- Private consumption, which forms 55% of India’s GDP, grew at about 8% — a “decent” rate, he noted.
- Investments, contributing 34% of GDP, also posted healthy growth, crossing 7% in year-on-year terms.
Exports, however, showed weaker momentum compared to imports, and inventories saw a sharp contraction of 11.5% — a sign that demand is outpacing stock accumulation or that businesses are cautious about overstocking.
Government expenditure, meanwhile, remained muted and even contracted in the latest quarter.
India at ₹345 lakh crore, still shy of $4 trillion
The trailing twelve-month GDP chart shows India continuing its steady post-pandemic climb, reaching ₹345 lakh crore at market prices.
Shenoy noted:
- At ₹345 lakh crore, with the exchange rate at ₹89.7 per dollar, GDP works out to just under $3.5 trillion.
- After correcting earlier calculations, he added: “We are at $3.84 trillion… still short a little of the $4 trillion mark.”
The $4-trillion threshold, frequently cited in political and media narratives, remains within reach but not yet achieved.
Real vs Nominal: A point of concern
A significant insight comes from the real-versus-nominal growth trend. Historically, nominal GDP grew several percentage points faster due to inflation and pricing effects. But the latest numbers show nominal growth of just 8.73%, barely above real growth at 8.2%.
Shenoy flagged this gap, calling nominal “a little too low” — a sign of subdued price growth or tightening conditions in certain sectors.
Bigger economic picture
From the composition chart, India’s GDP remains heavily service-driven, with: Financial Services, Trade & Transport, Manufacturing, together forming the backbone of economic activity.
Agriculture and mining remain relatively small contributors, though agriculture shows stable moderate growth, while mining has been volatile.
Shenoy’s analysis points toward an economy that is:
- growing rapidly in real terms,
- shifting structurally toward services and manufacturing,
- driven primarily by consumption and investment,
- but facing pressures on pricing, exports, and inventory buildup.
India’s economy expanded at 8.2% in the July-September quarter, marking the fastest growth in six quarters, as manufacturing output picked up pace ahead of an expected demand uptick following the GST rate cut, according to official data.
The latest GDP print outpaced the 7.8% growth recorded in the previous quarter and sharply improved from 5.6% in the same period last year. Manufacturing — which accounts for about 14% of the country’s GDP — surged 9.1% in Q2, a significant jump from the 2.2% growth seen in the corresponding quarter of the previous financial year.