India’s GDP to Grow 6.7–6.9% in FY26, Says Deloitte India

India’s economy is expected to grow between 6.7% and 6.9% in the financial year 2025–26, according to Deloitte India’s latest India Economic Outlook report. The revised estimate reflects a 0.3 percentage point increase from the firm’s earlier forecast, signaling renewed optimism driven by rising domestic consumption, supportive government reforms, and improving investment sentiment. The projection aligns closely with the Reserve Bank of India’s forecast of 6.8% growth for FY26, indicating a consensus around the country’s strong macroeconomic fundamentals.

Key Growth Drivers

• Rising Domestic Demand: Deloitte expects consumption to surge during the ongoing festive season, providing a significant push to quarterly GDP growth.
• Policy Reforms: Continued structural changes, including the rollout of GST 2.0, are seen as enhancing the ease of doing business and improving tax efficiency.
• Private Investment: Businesses are increasingly optimistic, with anticipated trade deals with the US and EU likely to boost investor sentiment and capital flows.
• Monetary Support: With inflation largely under control, the current monetary policy stance remains accommodative, supporting credit growth and consumer spending.

Risks to the Outlook

Despite the positive projections, Deloitte cautioned against emerging risks,

• Global Trade Uncertainty: Ongoing geopolitical tensions and lack of finalized trade agreements could impact exports.
• Sticky Core Inflation: Though headline inflation has moderated, core inflation remains above 4%, limiting the RBI’s flexibility on interest rates.
• Global Interest Rates: If the US Federal Reserve maintains high rates, it could tighten liquidity globally and trigger capital outflows from markets like India.
• Resource Access and Supply Chains: Restrictions on critical minerals and supply disruptions could add to cost pressures.

Focus on MSMEs

• Deloitte also highlighted the importance of empowering the MSME sector, calling it a key engine for employment, exports, and income generation. Strengthening this segment is viewed as essential to achieving long-term inclusive growth.