What is RBI’s GDP growth projection for India in 2025-26?

Mumbai, June 6 (NationPress) The Reserve Bank of India (RBI) has forecasted India’s GDP growth at 6.5 percent for the fiscal year 2025-26. This projection is bolstered by resilient domestic economic activity driven by a robust agriculture sector, an uptick in industry, and a services sector anticipated to sustain its growth momentum.

The estimated quarterly growth rates for the financial year are: Q1 at 6.5, Q2 at 6.7, Q3 at 6.6, and Q4 at 6.3 percent.

“According to the provisional estimates released by the National Statistical Office (NSO), India’s real GDP growth for 2024-25 stands at 6.5 percent. So far in 2025-26, domestic economic activities have demonstrated resilience. The agriculture sector is performing strongly, with a successful harvest in both the kharif and rabi cropping seasons, ensuring a comfortable supply of major food crops. Healthy reservoir levels and the highest procurement of wheat in four years contribute positively to stock positions,” stated RBI Governor Sanjay Malhotra on Friday.

Industrial activity is gradually recovering, although the rate of growth varies. The services sector is expected to continue this positive trend. The PMI services index was strong at 58.8 in May 2025, indicating significant activity expansion.

On the demand side, private consumption remains robust, with a gradual increase in discretionary spending. Rural demand is steady, while urban demand continues to improve. Investment activity is also on the rise, as evidenced by high-frequency indicators.

Merchandise exports showed significant growth in April 2025, following a period of underperformance. Non-oil, non-gold imports exhibited double-digit growth, highlighting strong domestic demand conditions. Services exports are also on a positive growth path, he explained.

Looking ahead, the outlook for the agriculture sector and rural demand is likely to benefit from anticipated above-normal southwest monsoon rainfall. Meanwhile, sustained strength in the services sector should support the revival of urban consumption.

The government’s ongoing focus on capital expenditure, high capacity utilization, rising business optimism, and easing financial conditions are expected to further stimulate investment activity, he noted.

However, uncertainty in trade policy continues to impact the prospects for merchandise exports, while the finalization of a free trade agreement (FTA) with the United Kingdom and advancements with other nations should boost trade in goods and services, according to the RBI Governor.

He also indicated that ongoing geopolitical tensions, global trade challenges, and weather-related uncertainties present downside risks to growth.