Ind-Ra Revises India's FY26 Economic Growth Projection Up to 7%

India Ratings & Research (Ind-Ra) has revised India’s GDP growth estimate for FY26 to 7%, up from its earlier forecast of 6.3% made in July 2025. The revision comes after better-than-expected numbers in the first quarter and limited impact from US tariff changes on overall trade. The Reserve Bank of India’s current projection stands slightly lower at 6.8%, compared with 6.5% growth in FY25. 

Early Growth Push from April–June Quarter 

India’s economy grew 7.8% in the April-June quarter of FY26, marking the fastest pace in five quarters. Data for the July-September period is scheduled to be released on November 28, 2025, as per news reports.  

Ind-Ra noted that conditions have shifted since its July forecast, especially after the US raised tariffs on several countries, with India facing some of the steepest duties since August 2025. Even so, the effect on global growth and trade has been smaller than initially estimated. 

Lower Prices and Wage Gains Lift Demand 

A sharper decline in inflation has been a driver behind the revised growth estimate. Falling prices have led to better real wage gains, particularly in rural areas. The changes made to GST rates are expected to give an additional lift to spending.  

Ind-Ra expects private final consumption expenditure to increase 7.4% in FY26, slightly higher than the 7.2% growth recorded in FY25. 

Exports Slow After New US Tariffs 

The tariff move has affected Indian exports to the US. Shipments dropped 11.9% in September and 8.9% in October 2025. During these 2 months, exports averaged $5.9 billion per month, lower than the $7.4 billion average seen between April and October.  

Although October witnessed a marginal improvement over September, Ind-Ra said it is still too early to view it as a turnaround. The agency flagged the need for progress on a trade agreement with the US and for exploring more export markets. 

Read More:  Chief Economic Advisor Nageswaran Says Indian Economy to Surpass $4 Trillion in FY26! 

Conclusion 

Ind-Ra said India’s growth outlook for FY26 remains evenly placed. Domestic demand may get support from easing prices and wage gains, while export performance will depend on trade developments and global conditions. Growth is expected to stay around the 7% mark under current trends. 

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