Standard & Poor's (S&P) ups India's FY26 growth forecast to 6.5% on resilient domestic demand

Standard & Poor's (S&P) Global Ratings has revised India’s gross domestic product (GDP) growth forecast for FY26 upward by 0.2% to 6.5%, supported by assumptions of a normal monsoon, easing crude oil prices, income-tax concessions, and expected monetary policy easing. In its Economic Outlook Asia-Pacific Q3 report released on June 25, 2025, S&P highlighted that India’s economic momentum will largely be driven by resilient domestic demand, despite global headwinds such as trade protectionism and geopolitical risks. The report noted that inflation is not a significant threat in the Asia-Pacific region, enabling further interest rate cuts by central banks across the region.
While India’s export performance may be weighed down by global uncertainties, S&P stated that internal consumption will cushion GDP growth. The agency had previously cut India’s FY26 growth projection to 6.3% in May 2025 due to rising global trade risks and potential spillovers from the United States (US) protectionist policies. However, the latest update reflects a more optimistic domestic outlook. S&P reiterated that India remains a key beneficiary of global supply chain realignments and is on track to become the world’s third-largest economy by FY30-35. Other global forecasts remain more conservative, with the World Bank maintaining India’s FY26 GDP forecast at 6.3% and the International Monetary Fund (IMF) projecting 6.2%, both citing trade and geopolitical uncertainties, including the ongoing conflict in the Middle East, which could pressure global oil prices.

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