Fitch Ratings has lifted its forecast for India’s real GDP growth in fiscal year 2025–26 to 6.9%, up from its previous projection of 6.5%. In its September 2025 Global Economic Outlook update, Fitch cited resilient domestic demand—buoyed by rising real incomes—and looser financial conditions as the primary drivers behind its upward revision.
Unlike many advanced economies grappling with slowing growth, India’s outlook benefits from a services sector that accounts for over half of its economic output and a manufacturing segment supported by government initiatives such as Production Linked Incentives. Infrastructure spending, including ongoing road and rail projects, also underpins investment activity.
Fitch noted that while consumer spending remains robust, supported by moderate inflation and improving wage growth, sustained expansion will depend on the Reserve Bank of India’s monetary policy stance and the government’s ability to push through structural reforms. In particular, continued efforts to streamline regulations, enhance supply-chain logistics, and attract foreign investment will be critical.
The rating agency also highlighted external risks, including persistent global uncertainties and trade tensions. While rising tariffs in major markets could weigh on India’s export sector, Fitch expects the economy’s strong domestic demand to cushion potential shocks.
India’s full-year growth next year is forecast to moderate gradually to around 6.3% in 2026–27, as the economy reverts toward its long-term potential. However, the recent upgrade underlines India’s position as one of the world’s fastest-growing large economies and reflects confidence in its growth trajectory amid shifting global economic conditions.
