India’s GDP is projected to expand between 7.5% and 7.8% in the current fiscal year 2025-26, driven by festive demand and strong services activity, according to a report by Deloitte India. However, the report also anticipates a moderation in growth to 6.6-6.9% in the following fiscal year 2026-27 due to a high base and ongoing global uncertainties.
Deloitte India highlighted that the real GDP had already grown by 8% in the first half of 2025-26 (April-September), showcasing the economy’s resilience amidst trade disruptions, policy changes in advanced economies, and volatile capital flows. The Economist at Deloitte India, Rumki Majumdar, attributed India’s resilience to sustained pro-growth policies and mentioned a shift towards supply-side reforms in 2026, focusing on MSMEs and developing tier-2 and tier-3 cities for growth.
Despite elevated external risks, the full impact may not be felt in FY26, with expectations of the India-US trade deal conclusion by the fiscal year-end to boost foreign investment and stabilize the currency, as per Majumdar. The report credited the growth to various policy measures in 2025, such as tax exemptions, policy rate cuts, and GST rationalization, which bolstered domestic demand and aided the recovery.
Moreover, the report highlighted favorable inflation trends, trade recalibration through multiple FTAs, and strategic trade policy shifts with agreements signed with the UK, New Zealand, and Oman, among others. These initiatives are seen to unlock manufacturing opportunities, expand India’s services presence globally, and enhance investor confidence for increased FDI, crucial for infrastructure and industrial expansion.
Another recent report mentioned a 8.2% GDP growth in Q2FY26, along with positive indicators like industrial output rebound and stable GST collections, supported by softer crude prices, easing global rates, and policy backing through tax and GST reductions, which are expected to further boost consumption and investment.
