Is India’s real GDP growth set to reach 6.7% this fiscal year?
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Synopsis
Discover how India's real GDP growth is projected to reach 6.7% this fiscal year, driven by robust GST reforms. This increase could reshape the economic landscape, providing insights into future trends and opportunities for growth.
Key Takeaways
- India’s GDP growth forecast raised to 6.7%
- Influenced by GST 2.0 reforms and domestic demand
- Manufacturing PMI hits highest level since 2008
- Services PMI also shows significant growth
- Strategic investments crucial for sustainable growth
New Delhi, Sep 29 (NationPress) The global professional services firm EY has increased India’s real GDP growth projection to 6.7%, an upgrade from the previous estimate of 6.5%, attributed to the strong impact of GST 2.0 reforms. This upward adjustment demonstrates expectations of monetary easing and enhanced domestic demand resulting from the rationalization of GST rates amidst global uncertainties, as detailed in EY’s Economy Watch September edition.
“Following a 7.8% growth in Q1 FY26, along with demand stimulation from GST reforms, India is anticipated to achieve an annual real GDP growth of 6.7% in FY26, despite global challenges impacting the country’s export potential in both goods and services,” the firm stated.
“With the benefits of GST 2.0 reforms leading to increased disposable incomes and domestic demand, coupled with efforts in trade diversification, India is strategically positioned to maintain its growth trajectory in FY26. It will be crucial to implement strategic investments in technology and targeted policy measures to convert these reforms into sustainable long-term economic benefits,” remarked DK Srivastava, Chief Policy Advisor at EY India.
In August 2025, the manufacturing PMI soared to 59.3, marking its highest level since February 2008, while the services PMI also rose to 62.9, the highest since June 2010.
The overall IIP growth improved to 3.5% in July 2025, up from 1.5% in June 2025, driven by notable enhancements in manufacturing output.
“CPI inflation increased from 1.6% in July 2025 to 2.1% in August 2025, driven by diminishing base effects and a slowdown in food price contractions. Concurrently, core CPI inflation rose from 4.2% to 4.3% during the same period,” the report stated.
WPI inflation turned positive at 0.5% in August 2025, compared to (-0.6%) in July 2025, reflecting a rise in vegetable prices due to a combination of fading base effects and a price increase in tomatoes.
According to the OECD, India recorded a seasonally adjusted quarterly real GDP growth of 7.3% from April to June 2025, the highest among all G20 nations.
Point of View
It is essential to approach the projections of India's GDP growth with a balanced perspective. The anticipated growth rate of 6.7% reflects optimism rooted in significant reforms and domestic demand, yet we must remain cautious of global economic challenges that could impact this trajectory.
NationPress
29/09/2025
Frequently Asked Questions
What factors contribute to the GDP growth projection?
The GDP growth projection is primarily influenced by robust GST 2.0 reforms, expectations of monetary easing, and increased domestic demand.
How does India's growth compare to other countries?
India's projected quarterly real GDP growth of 7.3% is the highest among all G20 economies, indicating a strong economic performance.
What is the significance of the recent PMI increases?
The rise in manufacturing and services PMI signals a positive trend in economic activity, reflecting stronger output and demand in these sectors.
How do inflation rates affect GDP growth?
Inflation rates can impact consumer spending and investment decisions, affecting overall economic growth. Recent CPI and WPI changes indicate inflationary pressures that need monitoring.
What role do strategic investments play in sustaining growth?
Strategic investments in technology and effective policy measures are crucial for translating reforms into sustainable, long-term economic gains.
