New Delhi, Jan 17 (NationPress) The Federation of Indian Chambers of Commerce and Industry (FICCI) expresses a positive outlook for India’s economy in 2025-26, anticipating that the Government's ongoing emphasis on capital expenditure and a surge in consumer spending will propel growth, even amidst external challenges.

The latest economic outlook report from the apex business chamber highlights that the government’s commitment to capital expenditure is projected to be a significant growth factor in 2025-26.

According to the report, investments in infrastructure and related sectors—such as roads, housing, logistics, and railways—are expected to enhance economic activity.

Consumer spending is predicted to gain traction, fueled by a favorable outlook for the agriculture sector, which is likely to boost rural consumption and sentiment in the first half of the upcoming fiscal year. Food inflation, which has been high for over a year and has impacted household finances, is anticipated to decline.

Moreover, monetary easing by the Reserve Bank of India (RBI), leading to lower interest rates, could further stimulate consumption, the report added.

“Taking these factors into account, economists involved in the study have estimated India’s GDP growth for the fiscal year 2025-26 to be between 6.5 percent and 6.9 percent, indicating a balanced perspective that reflects both prospects and challenges,” noted the industry body in its recent economic outlook.

The report anticipates a decrease in inflation, projecting a CPI-based inflation of 4.8 percent for 2024-25, aligning with the RBI’s forecasts made in its latest monetary policy statement in December 2024.

Concerning the potential impact of new US President Trump’s policies on India’s economy, the report suggests that there could be short-term disruptions in areas such as exports, foreign capital flows, and input costs for US trading partners, including India.

Additionally, the report mentioned that trade tensions, including a possible US-China trade conflict, could disrupt supply chains and elevate input costs in the short run. However, economists believe that the US will adopt a measured approach towards India. The report highlighted that India stands to gain from the global shift in supply chains away from China.

“Implementing targeted industrial policies and sector-specific strategies will be crucial for capitalizing on these opportunities. India may also benefit from lower global oil prices due to increased US production. To mitigate risks and unlock potential, economists recommended that India consider reducing tariffs on select US imports while maintaining revenue stability and minimal domestic effects,” the report concluded.