Deloitte Forecasts Robust GDP Growth for India in FY26, Slower Pace in FY27

India’s economic growth outlook remains strong despite global uncertainties. According to a recent forecast by Deloitte, the country is expected to record robust GDP growth in the current fiscal before witnessing a moderation next year. The projection highlights India’s resilience, reform driven momentum, and expanding services sector, even as external risks such as trade tensions and geopolitical instability continue to shape the global economic environment.

Why in News?

Deloitte India has projected that India’s GDP will grow at 7.5-7.8% in FY26, before moderating to 6.6–6.9% in FY27, citing strong domestic demand, policy reforms, and resilient services activity amid global headwinds.

GDP Growth Projections and Trends

• India’s growth trajectory continues to outperform many major economies.
• Deloitte estimates 7.5-7.8% GDP growth in FY2025–26, supported by festive demand, strong services performance, and policy support.
• Real GDP already grew by 8% in the first half of FY26 (April–September) despite challenges such as volatile capital flows and slowing global growth.
• However, growth is expected to ease to 6.6-6.9% in
• FY2026-27, largely due to a high base effect and lingering global uncertainties rather than domestic structural weakness.

Role of Policy Reforms and Domestic Demand

• Deloitte described 2025 as a year of resilience, driven by decisive fiscal, monetary, and labor reforms.
• Policymakers introduced tax exemptions, policy rate cuts, and GST rationalization to boost consumption and investment.
• Favourable inflation trends further supported demand conditions. These measures helped cushion the economy against external shocks, ensuring stable consumption and improved business sentiment.
• According to Deloitte, India’s resilience is the result of sustained pro-growth policy choices, not accidental macroeconomic luck.

Trade Strategy and Global Engagement

• India’s trade diplomacy has undergone a strategic shift.
• The country signed trade agreements with the UK, New Zealand, and Oman, operationalised the EFTA deal, and initiated negotiations with Israel.
• These efforts aim to diversify exports beyond traditional markets and expand India’s services footprint.
• Deloitte notes that such agreements strengthen investor confidence, unlock manufacturing opportunities, and support foreign direct investment (FDI), which remains critical for financing infrastructure and industrial expansion.

Focus Areas for FY27 and Beyond

• Looking ahead to 2026, Deloitte expects policy focus to gradually shift from demand-side measures to supply-side reforms.
• Priority areas include strengthening MSMEs, enhancing productivity, and developing tier-2 and tier-3 cities as new growth engines.
• India is also deepening engagement with emerging economies in Asia, Africa, and the Middle East, aligning with the broader Global South trade and investment realignment.
• These steps are expected to create more balanced and inclusive growth.

Key Summary at a Glance

Question

Q. According to Deloitte, India’s GDP growth in FY26 is projected at:

A. 6.0-6.5%
B. 6.6-6.9%
C. 7.0-7.2%
D. 7.5-7.8%