India’s GDP is projected to increase by 7.5% in the fiscal year ending March 2026, surpassing the earlier forecast of 7.4%. Fitch Ratings stated that the growth will be primarily driven by domestic demand, with consumer spending and investment anticipated to rise by 8.6% and 6.9%, respectively, in FY26.
Despite some signs of slowing activity in January and February, high-frequency indicators like GST collections, manufacturing output, air travel, and digital payments suggest a steady momentum for the Indian economy. The country has stood out as a bright spot globally, supported by strong domestic demand, robust services activity, and continuous public investment in infrastructure.
While there are indications of a slowdown in real activity in the initial months of 2026, the report emphasizes that the economy remains resilient, with credit growth still in double digits. Fitch Ratings anticipates a moderation in growth to 6.7% in FY26/27 and further to 6.5% in FY27/28, with inflation posing a constraint on real incomes and consumer spending growth.
The report also mentions that India’s GDP growth for Q3FY26 decelerated to 7.8% from 8.4% in the previous quarter following the revision of the GDP base year to 2022–23. Although investment growth may slow temporarily, the agency expects a recovery from the second half of FY26/27 with changes in financial conditions and a decrease in real interest rates.
