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India to Remain World's Fastest Growing Major Economy Through 2026: RBI

The Reserve Bank of India states that India will remain the world's fastest-growing major economy in 2025-26, driven by domestic resilience. The country is actively pursuing trade negotiations with nearly 50 nations, including the EU and the US, to diversify exports. Recent economic reforms in taxation, labour, and finance are expected to further strengthen growth prospects. The banking sector remains robust, with stress tests confirming its ability to withstand adverse scenarios.

Key Points: RBI: India Fastest Growing Major Economy 2025-26

  • GDP growth estimates show resilience
  • Active trade talks with ~50 nations
  • Banking sector shows strong capital buffers
  • Inflation remains below tolerance level
2 min read

India will remain fastest growing major economy in the world: RBI

RBI report highlights India's resilient GDP growth, trade negotiations with 50 nations, and strong banking sector as key drivers of economic optimism.

"The country is currently engaged in trade negotiations with 14 countries or groups, representing nearly 50 nations - Reserve Bank of India"

New Delhi, Jan 22

Amid global uncertainties, the current state of the economy provides ground for optimism going forward and the GDP growth estimates for 2025-26 indicate that India will remain the fastest growing major economy in the world, according to the Reserve Bank of India.

India has made significant efforts to diversify and strengthen its exports, aiming to mitigate external sector risks.

"The country is currently engaged in trade negotiations with 14 countries or groups, representing nearly 50 nations, including the European Union, Gulf Cooperation Council countries, and the United States," said the Central Bank in its monthly Bulletin.

The first advance estimates of real GDP growth for 2025-26 reflected the resilience of the Indian economy, driven by domestic factors amid a challenging external environment.

High-frequency indicators for December suggest continued buoyancy in growth impulses with demand conditions remaining upbeat.

"Headline CPI inflation edged up in December but remained below the lower tolerance level. The flow of financial resources to the commercial sector has increased over the past year, with both non-bank and bank sources contributing to the credit pick-up," said the RBI report.

The month of December saw India concluding trade negotiations with New Zealand and Oman. The year 2025 also witnessed major economic reforms, including the rationalisation of tax structures, implementation of labour codes for labour market reforms, and financial sector deregulation, all of which are expected to strengthen the growth prospects.

The Reserve Bank's 'Report on Trend and Progress of Banking in India 2024-25' underscored the resilience of the banking system, supported by strong capital buffers, improved asset quality, and robust profitability.

Macro stress test results from the latest 'Financial Stability Report' released in December 2025, affirmed the resilience of banks and non-banking financial companies to withstand losses under adverse scenarios and maintain capital buffers well above the regulatory minimum.

"Going forward, the policy focus on striking a balance between innovation and stability, consumer protection, and a prudent approach to regulation and supervision should help improve productivity and support long-term economic growth," said the RBI.

- IANS

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Reader Comments

P
Priya S
While the headline numbers are encouraging, I hope this growth translates into more jobs for our youth and better prices for farmers. The GDP figure feels distant sometimes. The reforms need to reach the common man.
R
Rohit P
Trade deals with the EU and GCC are a game-changer! This can bring huge opportunities for our MSMEs and tech sector. The resilience during global uncertainty shows our domestic economy is now the real engine.
S
Sarah B
As someone working in finance, the stress test results for banks and NBFCs are very reassuring. Strong capital buffers mean the system can handle shocks, which builds investor confidence. Prudent regulation is key.
V
Vikram M
Good to see inflation is under control. That's the most important thing for household budgets. If prices of essentials remain stable, this growth story will have a solid foundation. Jai Hind!
K
Karthik V
The report is optimistic, but respectfully, we must not become complacent. The "challenging external environment" is real. We need to aggressively build our manufacturing base and reduce import bills, not just celebrate rankings.

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