A better-than-expected monsoon, benchmark interest rate cut by the central bank, and liquidity infusion in the banking system are all going to contribute to a robust economic growth for the country in FY26, said CII President, Rajiv Memani.
Pegging the growth of the Indian economy at 6.4-6.7 per cent during 2025-26, Memani said on Thursday that external risks, such as geopolitical uncertainty will outweigh strong domestic demand.
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It was Memani’s first press conference after taking over as the CII President in June this year. Observing the factors that will influence the economy, he credited a good monsoon forecast, enhanced liquidity emanating from the Reserve Bank’s Cash Reserve Ratio (CRR) cut, and interest rate reduction to be defining in supporting the country;’s economic growth.
Last month, the Reserve Bank of India (RBI) announced slashing CRR by 100 basis points, which infuse liquidity of ₹2.5 lakh crore into the banking system for lending to productive sectors of the economy. Benchmark interest rate was also cut by 50 basis points to 5.5 per cent by the bank.
“We expect (economic growth in) a range of 6.4 to 6.7 per cent,” Memani said in response to a question on CII’s gross domestic growth (GDP) forecast for India during 2025-26.
Acknowledging the risks involved, especially as US’ trade tariff discussions are ongoing with India and the Israel-Iran war have only recently agreed to a ceasefire, Memani said there are some obvious downside risks, like geopolitical uncertainty, but “a lot of these relate to external trade risk”.
“I think a lot of them have been factored in, and also there are some upsides. So, hopefully they should get balanced out. From a CII standpoint, we’re looking at 6.4 to 6.7 per cent growth,” he said, adding that a “strong domestic demand” is an upscale.
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