Daijiworld Media Network – New Delhi
New Delhi, Jan 7: Amid rising global trade uncertainties, India’s economy is projected to grow at a robust 7.4 per cent in the financial year ending March 2026, up from 6.5 per cent recorded in the previous fiscal, according to the first advance estimates released by the Government of India on Wednesday.
The advance estimates last year had signalled a slowdown in the world’s fastest-growing major economy, with growth pegged at 6.4 per cent for 2024-25 — the weakest since the Covid-19 pandemic. This figure was subsequently revised upward to 6.5 per cent in May.
India’s economic outlook, however, continues to face challenges on the external front. Exports to the United States, India’s largest trading partner, have been subjected to steep tariffs of up to 50 per cent since August last year. Although trade negotiations between the two countries are underway, the prolonged tariff regime is expected to exert pressure on overall economic momentum.
Echoing similar concerns, the International Monetary Fund last month projected India’s real GDP growth at 6.6 per cent in fiscal 2026, moderating further to 6.2 per cent in fiscal 2027, assuming delays in finalising a U.S.-India trade agreement.
Despite these headwinds, the Indian economy has shown notable resilience in the first half of the current fiscal. Growth exceeded expectations, clocking 7.8 per cent in the June quarter and accelerating to 8.2 per cent in the three months ended September.
Reflecting improved domestic conditions, the Reserve Bank of India recently revised its GDP growth forecast for FY26 upward to 7.3 per cent from an earlier estimate of 6.8 per cent, citing easing price pressures. The central bank also lowered its consumer price inflation projection for the fiscal year to 2.0 per cent from 2.6 per cent earlier.
The moderation in inflation provided room for the RBI to cut its policy rate by 25 basis points to 5.25 per cent last month, even as it cautioned about emerging weaknesses in certain key economic indicators.