Due to strong domestic demand despite activity showing a small slowdown in January and February, India’s GDP is predicted to increase by 7.5% in the fiscal year ending in March 2026, higher than the 7.4% previously predicted, according to a research released on Friday. The growth will be driven by domestic demand, according to credit rating agency Fitch Ratings, with consumer expenditure and investment predicted to increase by 8.6% and 6.9%, respectively, in FY26.
Despite challenges from decreasing global trade, high frequency indicators like GST revenues, manufacturing production, air travel, and digital payments show consistent momentum. According to the research, India’s economy has been one of the few bright spots in the world economy over the previous several months thanks to strong domestic demand, a thriving services sector, and ongoing public infrastructure investment.
The study stated that the economy is still robust and that credit growth is still in double digits, although pointing out preliminary indications that real activity is slowing in January and February, such as data from PMI surveys. It stated, “We anticipate growth to slow in H1FY26/27; rising inflation will constrain real incomes, limiting consumer spending growth.”
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