S&P Global Ratings has retained a positive outlook for India’s economy, forecasting GDP growth of 6.5% in FY26 and a rise to 6.7% in FY27, driven by strong domestic consumption, fiscal stimulus, and accommodative monetary policy, according to its Economic Outlook Asia-Pacific report. Despite global uncertainties, high US tariffs, and weakening external demand, India’s economy grew 7.8% in Q1 FY26, marking the fastest expansion in five quarters. Official Q2 FY26 GDP data is due on November 28, with the RBI estimating 7% growth.
S&P highlighted that domestic demand remains robust and policy measures, including tax relief and RBI rate cuts, have supported growth. The Union Budget raised the income-tax rebate limit to ₹12 lakh, while the RBI cut rates by 100 basis points this year. GST reductions on around 380 everyday items have further boosted consumption.
The agency also noted that a potential India-US trade agreement could benefit exports. SBI expects Q2 FY26 GDP growth near 7.5%, supported by rising investment, rural demand, and strong festive-season spending. The RBI projects full-year growth at 6.8%, reflecting steady momentum.
