New Delhi – According to a Monday report, India’s economy is forecast to grow by 6.5 percent this fiscal year, largely thanks to strong domestic demand, recent tax cuts, and a more accommodative monetary stance.
S&P Global Ratings’ analysis projects GDP to climb to 6.7 percent in the following fiscal year, while concluding that risks to the outlook remain balanced.
The country’s growth momentum stays high, with the report noting a 7.8 percent expansion of real GDP in the April–June quarter of FY26 – the fastest pace in five consecutive quarters.
Government officials will announce the GDP figures for the July–September quarter on November 28.
S&P Global’s latest Economic Outlook for the Asia‑Pacific region points out that domestic demand continues to back growth, even amid the influence of U.S. tariffs on Indian exports.
The agency describes the growth trajectory as balanced, observing no major downside risks at present.
The Reserve Bank of India has projected GDP growth of 6.8 percent for the current fiscal year, a slight uptick from last year’s 6.5 percent increase.
S&P also highlighted that a potential trade deal between India and the United States could boost investor confidence and support labor‑intensive sectors.
The report stressed that recent reductions in GST rates, expanded income‑tax relief, and lower borrowing costs will benefit middle‑class households and reinforce consumer spending.
The 2025–26 Union Budget lifted the income‑tax rebate threshold from Rs 7 lakh to Rs 12 lakh, delivering roughly Rs 1 lakh crore in tax savings to middle‑income families.
Moreover, the RBI cut its benchmark policy rate by 50 basis points in June to 5.5 percent, the lowest level in three years.
GST on almost 375 essential and widely‑used goods was also lowered in September.
“Asia‑Pacific growth should mostly hold up in 2026, but the room for further policy interest rate cuts is modest,” said S&P Global Ratings Asia‑Pacific chief economist Louis Kuijs.
“We expect higher trade restrictions and industrial policy to weigh on trade, investment, and growth in coming years,” Kuijs added.
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