S&P Global Research has forecast that the Indian economy will continue to grow at 6.5% in the current year, powered by strong domestic consumption and supportive policy measures. In its latest Asia-Pacific Economic Outlook, the firm notes that India’s real GDP posted a robust 7.8% growth in the April–June quarter of FY26, the fastest in five quarters. According to the report, sustained household demand, GST rate cuts and rising consumer spending are helping maintain the growth momentum. If geopolitical risks ease, India’s economic expansion could improve further to 6.7% next year.
The report highlights that despite trade uncertainty between India and the US, along with additional tariffs imposed by the US, India’s growth remained unexpectedly strong during the June quarter. GST reductions on 375 essential products have boosted market purchases, while higher tax rebates for middle-income earners (increased from ₹7 lakh to ₹12 lakh) have boosted household savings, indirectly strengthening the economy.
Meanwhile, the Reserve Bank of India has projected a slightly higher 6.8% GDP growth for FY26, supported by robust domestic demand and accommodative policy. Experts believe another rate cut may be possible in December after the RBI’s earlier 50-basis-point cut reduced the benchmark to a three-year low. However, prolonged trade restrictions and pending agreements with the US remain key risks that could slow investment and overall growth.
