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Fitch Ratings upgrades India’s FY26 growth outlook to 6.9 percent citing strong domestic demand, but warns of risks from US tensions.
Fitch projects India’s growth to ease to 6.3 percent in FY27 and 6.2 percent in FY28.
India GDP Growth Projection: India’s projected growth outlook for FY26 has been upgraded to 6.9 per cent from 6.5 per cent earlier by Fitch Ratings on account of strong domestic demand and supportive financial conditions. According to Moneycontrol report, it came following the unexpected 7.8 per cent India’s GDP growth in the first quarter of FY2025-26, beating the previous quarter growth of 7.4 per cent.
The rating agency as quoted by MC report flagged certain risk on the projected growth, including rising tensions with the US. It could dampen investors’ sentiment even if the custom duty is being negotiated down, it said.
Fitch projects India’s growth to ease to 6.3 percent in FY27 and 6.2 percent in FY28. Domestic demand will remain the main driver, but the strong impulse from early FY26 is unlikely to sustain through the second half of the year, it said.
The Indian economy had grown at 6.5% in the year-ago quarter, and at 7.4% in the previous quarter (Q1 FY26).
“Real GDP has been estimated to grow by 7.8% in Q1 of FY 2025-26 over the growth rate of 6.5% during Q1 of FY 2024-25,” the Ministry of Statistics & Programme Implementation said in a statement.
Real GDP, or GDP at constant prices, in Q1 of FY 2025-26 is estimated at Rs 47.89 lakh crore, against Rs 44.42 lakh crore in Q1 of FY 2024-25.
Nominal GDP, which factors in inflation, has witnessed a growth rate of 8.8% in Q1 of FY 2025-26.
The agriculture and allied sector has observed the real GVA growth rate of 3.7%, as compared to the growth rate of 1.5% registered in Q1 of last financial year.
Secondary sectors, prominently manufacturing (7.7%) and construction (7.6%), registered above 7.5% growth rate at constant prices in this quarter. “Mining & quarrying (-3.1%) and electricity, gas, water supply and other utility services sector (0.5%) has seen moderated real growth rate during Q1 of FY 2025-26,” said the ministry.
The tertiary sector (9.3%) recorded substantial growth rate at constant prices in Q1 of FY 2025-26, over the growth rate of 6.8% in Q1 of FY 2024-25.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
September 10, 2025, 12:16 IST
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