NewKerala.com

India's GDP Growth to Hit 7.5-7.8% in FY26, May Moderate Next Year

India's GDP is projected to grow between 7.5 and 7.8 percent in the current fiscal year 2025-26, according to a Deloitte India report. The growth is attributed to robust festive demand, strong services activity, and decisive policy moves like tax exemptions and GST rationalization. However, the consultancy warns growth could moderate in FY27 due to a high base effect and persistent global uncertainties. The report also highlights a strategic pivot in trade policy, with new agreements seen as unlocking manufacturing opportunities and boosting foreign investment.

Key Points: India's FY26 GDP Growth Forecast at 7.5-7.8%: Deloitte Report

  • FY26 growth driven by festive demand & services
  • Growth may moderate to 6.6-6.9% in FY27
  • Policy focus shifting to supply-side reforms
  • New trade deals with UK, NZ, Oman bolster exports
  • Tax cuts & GST rationalisation supported domestic demand
2 min read

India's GDP likely to grow at 7.5-7.8 pc in FY26: Report

Deloitte India forecasts 7.5-7.8% GDP growth for FY26, driven by strong demand. Growth may moderate in FY27 due to global uncertainties.

India's GDP likely to grow at 7.5-7.8 pc in FY26: Report
"India's resilience is no accident. It stems from sustained pro-growth policies. - Rumki Majumdar"

New Delhi, Jan 14

India's GDP will likely expand 7.5-7.8 per cent in the current fiscal, driven by festive demand and robust services activity, a report said on Wednesday.

The report from Deloitte India, however, noted that the growth could moderate to 6.6-6.9 per cent in FY27 because of a high base and lingering global uncertainties.

The business consultancy noted that real GDP grew 8 per cent in the first half of 2025-26 (April-September), underscoring the economy's resilience amid trade disruptions, policy shifts in advanced economies and volatile capital flows.

"India's resilience is no accident. It stems from sustained pro-growth policies," Deloitte India, Economist, Rumki Majumdar said. "With demand-side levers largely addressed, policy focus in 2026 will shift toward supply-side reforms, focusing on MSMEs, and developing tier-2 and tier-3 cities as new engines of growth," Majumdar added.

Though external risks remain elevated, their full impact may not materialise in FY26, Majumdar said, adding that the India-US trade deal is likely to conclude by the end of this fiscal, which should revive foreign investment and stabilise the currency.

The report credited the decisive policy moves in 2025 including tax exemptions, policy rate cuts and GST rationalisation, driving the growth by shoring up domestic demand and supporting the recovery.

Favourable inflation trends added buoyancy, while trade recalibration through multiple FTAs strengthened exports, the report said.

The business consultancy highlighted a strategic pivot in trade policy, with India signing agreements with the UK, New Zealand and Oman, operationalising the EFTA deal and initiating negotiations with Israel.

"These partnerships unlock manufacturing opportunities and expand India's services footprint beyond the US, while reinforcing investor confidence and paving the way for increased FDI, which remains critical for financing infrastructure and industrial expansion," Majumdar said.

Another recent report from a fund house cited 8.2 per cent GDP growth in Q2FY26, a sharp rebound in industrial output and stable GST collections as the positives of domestic fundamentals.

Softer crude prices, easing global rates and policy support through tax and GST cuts are expected to further support consumption and investment, the fund house predicted.

- IANS

Share this article:

Reader Comments

P
Priya S
Good numbers, but I hope this growth translates to better prices for common people. Inflation may be "favourable" in reports, but my monthly grocery bill tells a different story. The MSME focus is a step in the right direction though.
V
Vikram M
The projected slowdown next year is a bit worrying. Global uncertainties are real, but we need consistent policy to maintain this momentum. The FTAs with UK and others are promising for exports. Jai Hind!
R
Rohit P
As a small business owner, the GST rationalisation and tax cuts mentioned have genuinely helped. Cash flow is better. If they can simplify compliance further for MSMEs, that would be the real boost. The report seems accurate from ground experience.
S
Sarah B
Interesting analysis. The strategic pivot in trade policy is smart. Diversifying beyond the US market is essential for long-term stability. The EFTA deal could open great opportunities in tech services. Hope the growth is inclusive.
K
Karthik V
Resilient growth is good, but let's not ignore the "lingering global uncertainties". Our economy is not an island. We need to build stronger domestic supply chains so external shocks affect us less. The report is a balanced view.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50