S&P Global Projects India's GDP Growth at 6.7% for Next Fiscal Year: Economic Outlook Analysis

The Reserve Bank of India has projected GDP growth at 6.8 percent for the current fiscal year as economic indicators remain positive.

According to a report released Monday by S&P Global Ratings, India's economy is expected to achieve 6.5 percent growth in the current financial year, primarily fueled by robust domestic demand, recent tax reductions, and monetary policy relaxation measures.

The S&P Global Ratings analysis further predicts growth will increase to 6.7 percent in the upcoming fiscal year, with a balanced risk outlook for the economy.

India has maintained strong growth momentum, with real GDP expanding by 7.8 percent in the April-June quarter of FY26, marking the fastest growth rate in five consecutive quarters, the report indicated.

The government will be releasing official GDP figures for the July-September quarter on November 28, providing further insight into economic performance.

In its latest Economic Outlook for the Asia-Pacific region, S&P Global emphasized that domestic demand continues to drive growth in India, despite potential impacts from US tariffs on Indian exports.

The ratings agency characterized the growth outlook as balanced, noting no significant downside risks in the immediate future.

The Reserve Bank of India has maintained its GDP growth projection at 6.8 percent for the current fiscal year, which is slightly above last year's expansion rate of 6.5 percent.

S&P Global added that a potential trade agreement between India and the United States could enhance investor confidence and provide support for labor-intensive sectors of the economy.

The report highlighted that recent reductions in GST rates, income tax relief measures, and lowered interest rates will provide benefits to the middle class and strengthen overall consumption patterns.

The Union Budget for 2025-26 increased income tax rebate limits from Rs 7 lakh to Rs 12 lakh, delivering approximately Rs 1 lakh crore in tax savings to middle-income households across the country.

Additionally, the RBI reduced its benchmark policy rate by 50 basis points in June to 5.5 percent, bringing it to the lowest level seen in three years.

GST rates were also cut on nearly 375 essential and mass-consumption items in September as part of broader economic stimulus efforts.

"Asia-Pacific growth should mostly hold up in 2026, but the room for further policy interest rate cuts is modest," stated S&P Global Ratings Asia-Pacific chief economist Louis Kuijs in the report.

"We expect higher trade restrictions and industrial policy to weigh on trade, investment, and growth in coming years," Kuijs further added.