India's Economy Projected to Grow at 6.7-6.9% in FY26 Fueled by Reforms: Deloitte

Deloitte India has revised its GDP forecast for FY26 to a range of 6.7%-6.9%, with an average growth of 6.8%, up by 30 basis points from its earlier estimate. The revision follows stronger-than-expected growth in consumption and investment during the first quarter of the fiscal year.

Growth Performance in Early FY26

India recorded a 7.8% GDP growth in the April-June quarter of FY26, compared with 6.5% in the same period last year, according to official data. The country’s nominal GDP grew 8.8% year-on-year during the same period. Deloitte said similar growth levels are expected next year, though trade and investment uncertainties may affect the range of estimates.

Drivers of Economic Growth

Growth is expected to be supported by domestic demand, monetary policy support, and structural reforms such as the proposed GST 2.0. Low inflation is expected to help maintain spending power. Rural demand also remains stable, with the rural consumer confidence index above 100, and improved crop output is likely to aid rural income in the coming months.

Consumption and Investment Trends

The report noted that the festive quarter could see higher consumption spending, followed by a pick-up in private investments as businesses adjust to demand conditions. India is also expected to pursue trade agreements with the US and the EU later this year, which could influence investment sentiment.

Risks to Outlook

Deloitte cautioned that global trade frictions, supply chain disruptions, and higher borrowing costs in developed economies could impact growth. Persistent core inflation above 4% since February may also limit the Reserve Bank of India’s ability to reduce interest rates further. Prolonged high rates by the US Federal Reserve could tighten global liquidity and increase the risk of capital outflows.

Read More: IMF Raises India’s FY26 Growth to 6.6% But Cautions Global Growth is 'Fragile'!

Conclusion

India’s economy grew 6.5% in FY25 after expanding 9.2% in FY24, remaining among the fastest-growing major economies. Deloitte’s FY26 projection of 6.7-6.9% suggests steady momentum, supported by domestic demand but tempered by global challenges.

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