Key Takeaways
- CEA V Anantha Nageswaran projects FY26 GDP growth above 6.8%, up from earlier 6.3-6.8% forecast
- Growth boost expected from GST rate cuts and income tax relief measures
- India maintains fastest-growing major economy status with 7.8% Q1 growth
- US-India trade deal conclusion could provide further economic momentum
India’s Chief Economic Adviser V Anantha Nageswaran has expressed strong confidence in the country’s economic outlook, projecting GDP growth to exceed 6.8% in the current financial year. The upgraded forecast reflects positive momentum from consumption-boosting measures including GST rate reductions and income tax relief.
“I am comfortable looking at a number north of 6.8 per cent now,” Nageswaran stated during CNBC-TV18’s Global Leadership Summit 2025. “My original range was 6.3 to 6.8 per cent projected in the Economic Survey. Back in August, we were concerned about reaching even the lower end of the 6-7 range. Now there’s significant comfort in saying growth will definitely be north of 6.5 percent.”
Strong Economic Performance
India recorded impressive 7.8% GDP growth in the first quarter of FY26, driven by robust performance in the agricultural sector and services including trade, hotels, financial services, and real estate. This follows the country’s previous peak growth of 8.4% during January-March 2024.
India continues to outpace other major economies, with China registering 5.2% growth during the April-June period.
Trade Deal Potential
Nageswaran highlighted that growth could receive an additional boost if the long-pending Bilateral Trade Agreement with the United States is finalized. “If by some chance, as we are still hoping, there is a resolution on the trade front, then the upward bias will become a mainstream forecast,” he noted.
While expressing optimism that the deal would be “hopefully done soon,” the CEA did not provide a specific timeline. The absence of a trade agreement has led to significant trade barriers, including steep US tariffs on Indian goods.
Currently, the US imposes a 50% tariff on Indian goods effective from August 27, among the highest rates globally. These include a 25% penalty targeting India’s crude oil imports from Russia. Earlier on August 7, the Trump administration had enforced an initial 25% tariff, citing India’s persistent Russian oil purchases and longstanding trade barriers.
