Deloitte raises India's 2025-26 GDP forecast to 6.8%, points to economic resilience

New Delhi [India], October 23 : Deloitte India has raised India's GDP forecasts for the financial year 2025-26 by 30 basis points to 6.8 per cenDeloitte raises India's 2025-26 GDP forecast to 6.8%s are expected in the subsequent year, but the range of variation remains broader due to uncertainties related to trade and investment
India has entered the FY 2025-26 on a high note, posting a remarkable 7.8 percent GDP growth in the April-June quarter, well above market expectations.
Deloitte India forecasts a GDP growth between 6.7 and 6.9 percent, averaging 6.8% this fiscal year, up by 0.3 percentage points from Deloitte's previous forecast.
"This performance signals not just resilience but a renewed sense of India emerging stronger than most nations. Similar growth rates are expected in the subsequent year, but the range of variation remains broader due to uncertainties associated with trade and investment," Deloitte India said in a statement Thursday.
Growth is likely to be supported by buoyant domestic demand, accommodative monetary policy, and structural reforms, such as GST 2.0, it added.
Low inflation is expected to contribute to spending as purchasing power improves.
A strong rural consumer confidence index (above 100) indicates optimism in rural demand, and improved crop output will support farm income in the coming months, it added.
"Demand during the festive quarter will likely be fueled by a notable rise in consumption spending. This is expected to be followed by strong private investment, as businesses respond to uncertainties and prepare to meet elevated demand. There is also anticipation that India will strike a deal with the US and the EU by the end of the year, which is expected to elevate overall investment sentiments. Strong growth in the first and third quarters is likely to drive overall annual growth," said Rumki Majumdar, Economist, Deloitte India.
However, growth in the current fiscal year remains vulnerable to global headwinds, it has asserted.
Escalating trade uncertainties and India's inability to secure a trade deal with the United States are potential risks that could impact India's economic growth. Heightened trade uncertainties could lead to a rapid decline in exports, while supply chain shocks resulting from geopolitical fallout may impact costs and production, Deloitte India said.
Restrictions on access to critical minerals and higher inflation in the West could lead to increased inflationary pressures in India.
"India is no island, and global risks will inevitably weigh on its economic outlook. While years of policy efforts have helped bring down headline inflation--largely due to easing food and fuel prices--core inflation remains stubbornly high, consistently above 4% since February. This persistent price pressure could constrain the Reserve Bank of India's ability to pursue further rate cuts. Moreover, if the US Federal Reserve maintains elevated policy rates for an extended period, it could tighten global liquidity conditions, further limiting the RBI's monetary flexibility. Such a scenario may also accelerate capital outflows from emerging markets like India, a trend already visible in recent months", added Majumdar.
India's real GDP is estimated to have grown by 7.8 per cent in the April-June quarter of the financial year 2025-26, surpassing the 6.5 per cent growth rate in the same quarter of the previous fiscal, according to official data. India's nominal GDP grew at an annual rate of 8.8 per cent during the April-June quarter.
In the Economic Survey for 2024-25, tabled in Parliament on January 31, the real GDP growth for 2025-26 was projected to be between 6.3 and 6.8 per cent. The GDP estimates for the year 2025-26 haven't been revised since then.
In 2024-25, the Indian economy grew by 6.5 per cent in real terms.
In 2023-24, India's GDP grew by an impressive 9.2 per cent, continuing to be the fastest-growing major economy.
According to official data, the economy grew 8.7 per cent and 7.2 percent, respectively, in 2021-22 and 2022-23.