India's Economy to Grow 6.4-6.7% in FY26, but Faces Global Headwinds, Says Deloitte

India’s economy is expected to grow between 6.4% and 6.7% in FY26, according to Deloitte India reports. The forecast is slightly lower than the 6.5% growth recorded in FY25. The outlook is based on steady domestic demand and ongoing trade developments.

The report points to resilient consumer spending, moderate inflation, and domestic policy efforts as key drivers of growth. Deloitte said these factors are expected to support overall economic activity through the fiscal year.

Trade Deals in Focus

India’s ongoing trade negotiations are expected to play a role in boosting growth, as per the reports. Talks with the US are in progress, while discussions with the UK took place in May 2025. A deal with the European Union is anticipated by the end of the year.

These trade deals are expected to bring gains in employment, income, and market access. Sectors like digital technology, artificial intelligence, and startup innovation are also expected to benefit from closer cooperation with global partners.

Read more: Fitch Lowers India's GDP Growth Forecast to 6.3%; Predicts Minimal Impact from US Tariffs!

Global Risks Cause Uncertainty

Deloitte highlighted potential risks from external developments. Regional conflicts, restrictions on certain raw materials, and uncertainty around specialised fertilisers may affect India’s growth outlook. The report said trade exposure needs close monitoring.

The report also notes that India is taking steps to strengthen its presence in global trade. Strategic diplomacy and trade policy reforms are being used to maintain economic momentum and expand international linkages.

Conclusion

Deloitte’s projection suggests a steady growth path for FY26, though global risks remain. Domestic conditions are expected to support the economy, while trade agreements may offer additional opportunities if external disruptions are managed carefully.

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