Fitch projects India's GDP growth at 6.4 pc for FY26, retains 6.3 pc for FY27

IANS April 17, 2025 307 views

Fitch Ratings has projected India's GDP growth at 6.4% for the fiscal year 2026, maintaining optimism despite global economic challenges. The global ratings agency highlighted India's robust domestic market as a key insulator against potential trade tensions. India's economic momentum is showing signs of recovery, with growth rebounding to 6.2% in the third quarter. The forecast reflects confidence in India's economic fundamentals and resilience in an uncertain global environment.

"It is difficult to predict US trade policy with any confidence." - Fitch Ratings
New Delhi, April 17: Fitch Ratings on Thursday projected India's GDP growth at 6.4 per cent for FY26 amid global uncertainties, while retaining the projections for the next financial year (FY27) unchanged at 6.3 per cent.

Key Points

1

Fitch reduces global growth projections for 2025

2

India's large domestic market offers economic insulation

3

Economic momentum recovering with 6.2% growth in Q3

For India, the global ratings agency reduced GDP growth estimates for both the 2024-25 fiscal year and the current 2025-26 fiscal year by 10 basis points to 6.2 per cent and 6.4 per cent, respectively, amid fears of a global trade war.

The growth forecast for the 2026-27 fiscal year remains at 6.3 per cent, according to Fitch.

In addition to India's revised growth forecast, Fitch also lowered its global growth projections for 2025 by 0.4 percentage points and cut growth estimates for China and the US by 0.5 percentage points, from its March outlook.

"It is difficult to predict US trade policy with any confidence. Massive policy uncertainty is hurting business investment prospects, equity price falls are reducing household wealth, and US exporters will be hit by retaliation," Fitch stated in its special update to the quarterly Global Economic Outlook.

The US GDP growth rate is expected to stay positive at 1.2 per cent for 2025. Meanwhile, China's growth is projected to fall below 4 per cent both this year and next, and growth in the eurozone is anticipated to remain well below 1 per cent, according to Fitch's projections.

The large size of India’s domestic market, which reduces reliance on external demand, is expected to insulate the country from the US tariff hike, according to the global ratings agency.

A recent Morgan Stanley report had also stated that India is the "best placed country in Asia", amid the global uncertainty triggered by US President Donald Trump’s threat to jack up tariffs, because of the nation’s low goods exports to GDP ratio and strong fundamentals.

"While India is exposed to direct tariff risks, we believe on balance India is less exposed to global goods trade slowdown, considering that it has the lowest goods exports to GDP ratio in the region," the report stated.

The Indian economy picked up momentum, growing 6.2 per cent in the third quarter of FY25, recovering from a near two-year low of 5.6 per cent in the July-September period.

Reader Comments

R
Rahul K.
These growth projections look promising! India's domestic market strength is really paying off during these uncertain times. Hope we can maintain this momentum 🤞
P
Priya M.
Interesting how we're outperforming China now. But I wonder if these numbers truly reflect the ground reality - many small businesses are still struggling post-pandemic.
A
Amit S.
The domestic market focus is key! We need more policies that boost local manufacturing and consumption. Make in India seems to be working 💪
S
Sunita R.
While the numbers look good, I hope the growth translates to better jobs and wages for regular people. GDP figures don't always mean better quality of life.
V
Vikram J.
The US-China trade war might actually benefit India if we play our cards right. Time to attract more manufacturing investments! 🇮🇳
N
Neha P.
The quarterly recovery from 5.6% to 6.2% is impressive! Shows our economy's resilience. Hope this upward trend continues through FY26.

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India GDP Fitch Ratings Economic Forecast Global Trade Economic Growth