New Delhi: India’s economy is expected to grow 6.5 per cent in the current financial year, driven mainly by strong domestic demand, recent tax cuts, and monetary policy easing, a new report said on Monday.
The data compiled by S&P Global Ratings also projected growth to rise to 6.7 per cent in the next fiscal, with risks to the outlook remaining balanced.
India’s growth momentum has remained strong, with the real GDP expanding 7.8 per cent in the April–June quarter of FY26, the fastest pace in five quarters, the report said.
The government will release the GDP figures for the July–September quarter on November 28.
In its latest Economic Outlook for the Asia-Pacific region, S&P Global said domestic demand continues to support growth, even with the impact of US tariffs on Indian goods.
The ratings agency described the growth outlook as balanced with no major downside risks for now.
The Reserve Bank of India has projected GDP growth at 6.8 per cent for the current fiscal year, slightly higher than last year’s 6.5 per cent expansion.
S&P added that a potential trade deal between India and the US could improve investor confidence and support labour-intensive industries.
The report highlighted that recent cuts in GST rates, income tax relief, and lower interest rates will benefit the middle class and strengthen consumption.
The Union Budget for 2025–26 increased the income tax rebate limit from Rs 7 lakh to Rs 12 lakh, providing Rs 1 lakh crore in tax savings to middle-income households.
In addition, the RBI reduced its benchmark policy rate by 50 basis points in June to 5.5 per cent, the lowest level in three years.
GST rates on nearly 375 essential and mass-use items were also cut in September.
“Asia-Pacific growth should mostly hold up in 2026, but the room for further policy interest rate cuts is modest,” said S&P Global Ratings Asia-Pacific chief economist Louis Kuijs.
“We expect higher trade restrictions and industrial policy to weigh on trade, investment, and growth in coming years,” Kuijs added.
(IANS)
