India`s GDP to grow at 6.3% in FY26: India Ratings & Research
Citing uncertainties around US tariffs and weak investment climate, India Ratings & Research (Ind-Ra) has pared India's growth projection for the current fiscal to 6.3 per cent. It expects country’s GDP to grow at 6.3 per cent year on year in FY26, which is 30 basis point lower than its earlier forecast of 6.6 per cent made in December 2024.
It highlighted that monetary easing, faster-than-expected decline in inflation and likely above-normal rainfall in 2025 are some of the tailwinds that are likely to minimise the impact of strong headwinds emanating from the uncertain global scenario. Further, it expects average retail inflation at 3 per cent and exchange rate at Rs 86.9 to a dollar in the current fiscal.
It expects monetary easing and capital expenditure to be the major growth drivers. It noted that the pace of monetary easing in 2025 has been faster than its expectations. However, the tariff hikes by the US have increased the global economic uncertainty, leading to slower growth for both global demand and trade. It also hinted that this led to investors adopting a wait and watch mode before taking decisions on greenfield expansion.
