india-s-fy26-growth-forecast-at-6-5-says-s-p-report

Global Ratings agency S&P on Tuesday predicted India’s growth forecast for India for the financial year 2025-26 to be 6.5 per cent, a 0.2 per cent increase from its last forecast.

The agency’s Q3 report Economic Outlook Asia-Pacific report credited the country’s domestic demand, normal monsoon, lower crude oil prices, monetary easing, and income-tax concessions for the higher growth prediction.

“Indeed, we see India's GDP growth holding up at 6.5 per cent in FY26,” the report said.

 

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The latest figure by the agency is in contrast to its May, 2025, growth projection of 6.3 per cent for the current financial year. Higher uncertainties over the US tariff policy and its effects on India’s economy were the main reasons for the lower growth rate projection. 

The previous report, titled, Global Macro Update: Seismic Shift in US Trade Policy Will Slow World Growth, the agency had said, “We reiterate that there are no winners in a scenario of escalating protectionist policies.”

Despite this fiscal’s optimistic projection, S&P Global Ratings maintains that any further escalation in the Middle East tensions and consequent long-lasting increases in oil prices could still have major impact on the economy in Asia-Pacific.

The reports also said domestic demand will exceed exports.

On June 10, the World Bank’s Global Economic Prospects Report kept India’s GDP growth rate for FY26 at 6.3 per cent, mostly due to rising trade tariff-related tensions and decreasing exports that had been triggered by weaker activity in key trade partners. 

In April, the International Monetary Fund (IMF) pared down its FY26 growth forecast for India by 30 basis points to 6.2 per cent, again, as a result of heightened trade tensions and global uncertainty. 

In its May report, S&P had said that India was on track to become the world’s third-largest economy between FY30 and FY35, and that changes in global trade policy will positively impact supply chain diversification for India.