Is India's GDP Set to Grow by 6.5% This Fiscal Year?
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Synopsis
India's economy is on track to grow by 6.5% this fiscal year, driven by strong domestic demand and supportive fiscal policies. Discover key insights from S&P Global's report, highlighting the country's robust growth trajectory and future prospects.
Key Takeaways
- India's economy expected to grow by 6.5% this fiscal year.
- Strong domestic demand and tax cuts are key drivers.
- Real GDP expanded 7.8% in the April–June quarter.
- Potential trade deal with the US may boost growth.
- GST rates on essential items reduced to strengthen consumption.
New Delhi, Nov 24 (NationPress) India's economy is projected to expand by 6.5 percent during the ongoing financial year, primarily fueled by robust domestic demand, recent tax adjustments, and a more accommodating monetary policy, according to a report released on Monday.
The analysis from S&P Global Ratings further anticipates growth to increase to 6.7 percent in the subsequent fiscal year, with the outlook risks remaining relatively balanced.
India's growth trajectory has shown resilience, with the real GDP rising by 7.8 percent in the April to June quarter of FY26, marking the fastest growth rate in five quarters, the report indicated.
The government is scheduled to announce the GDP figures for the July to September quarter on November 28.
In its recent Economic Outlook for the Asia-Pacific area, S&P Global emphasized that domestic demand continues to underpin growth, despite the repercussions of US tariffs on Indian exports.
The ratings agency characterized the growth outlook as balanced, devoid of significant downside risks for the time being.
The Reserve Bank of India has estimated GDP growth to be 6.8 percent for the current fiscal year, marginally above last year's expansion of 6.5 percent.
S&P noted that a possible trade agreement between India and the US could bolster investor confidence and benefit labor-intensive sectors.
The report underscored that recent reductions in GST rates, income tax relief, and decreased interest rates will favor the middle class and enhance consumption levels.
The Union Budget for 2025–26 raised the income tax rebate limit from Rs 7 lakh to Rs 12 lakh, resulting in Rs 1 lakh crore in tax savings for middle-income families.
Additionally, the RBI lowered its benchmark policy rate by 50 basis points in June to 5.5 percent, the lowest in three years.
GST rates on approximately 375 essential and widely used products were also reduced in September.
“Growth in the Asia-Pacific should largely remain stable in 2026, although the potential for additional policy interest rate cuts is limited,” commented Louis Kuijs, chief economist at S&P Global Ratings for the Asia-Pacific region.
“We foresee increasing trade barriers and industrial policies to have a negative impact on trade, investment, and growth in the coming years,” Kuijs added.
Point of View
It's essential to recognize the momentum of India's economy amidst global uncertainties. The rise in GDP, supported by domestic policies and demand, reflects resilience. An unbiased perspective indicates cautious optimism, as we look toward future developments such as trade agreements and fiscal strategies that aim to bolster growth.
NationPress
24/11/2025
Frequently Asked Questions
What is India's projected GDP growth for this fiscal year?
India's GDP is projected to grow by 6.5% in the current financial year.
What factors are driving India's economic growth?
The growth is primarily driven by strong domestic demand, recent tax cuts, and easing of monetary policy.
When will the government release the GDP figures for the July-September quarter?
The government is set to release the GDP figures on November 28.
What impact will a potential trade deal with the US have?
A trade deal could enhance investor confidence and support labor-intensive industries in India.
What recent changes have been made to tax policy?
The Union Budget for 2025–26 increased the income tax rebate limit from Rs 7 lakh to Rs 12 lakh.
