The BRICS TimesS&P Global Ratings forecasts India’s economy will grow by 6.5 percent in fiscal year 2025-26. It also sees growth hitting 6.7 percent in the following year, 2026-27.
S&P Global Ratings has released a positive forecast for India. They predict the economy will grow 6.5 percent in the current fiscal year 2025-26. Furthermore, they expect a 6.7 percent growth rate for the next year, 2026-27. The agency believes tax cuts and easier monetary policies will drive this growth. These moves will largely boost consumption across the country. Current estimates suggest India’s real GDP grew by 7.8 percent from April to June. This marks the fastest growth pace seen in the last five quarters.
Details Given in the Report
Official figures for GDP growth in the second quarter (July-September) will come out on November 28. S&P shared these insights in their ‘Economic Outlook Asia-Pacific Report’. They stated, “We estimate India’s GDP to grow 6.5 percent in fiscal 2025-26 and 6.7 percent in fiscal 2026-27.” The agency noted that risks are balanced on both sides. Domestic growth remains strong because of high consumption. This is holding steady despite the impact of American tariffs.
RBI’s Estimation
The Reserve Bank of India (RBI) projects a higher growth rate of 6.8 percent for this fiscal year. This is better than the 6.5 percent growth seen in 2024-25. S&P noted that lower Goods and Services Tax (GST) rates will help the middle class. This supports the income tax cuts and interest rate reductions launched this year. These changes suggest consumption will drive growth more than investment in the coming years.
Government and Tax Reforms
In the 2025-26 budget, the government raised the income tax exemption limit. It went up from Rs 7 lakh to Rs 12 lakh. This provided tax relief worth Rs 1 lakh crore to the middle class. Additionally, the RBI cut key policy rates by 0.5 percent in June. This brought rates down to a three-year low of 5.5 percent. Also, GST rates were reduced on nearly 375 items starting September 22. This made daily items cheaper. S&P mentioned that higher US tariffs affect export manufacturing. However, there are signs the US might lower duties on Indian goods.
