Key Takeaways
- Deloitte India raises FY2025-26 GDP forecast to 6.8%, up 30 basis points
- Strong 7.8% Q1 growth signals economic resilience above expectations
- Growth driven by domestic demand, festive spending, and potential trade deals
- Global risks including trade uncertainties and inflation remain key challenges
Deloitte India has upgraded India’s GDP growth forecast for 2025-26 to 6.8%, reflecting increased confidence in the country’s economic resilience. The revision comes after India posted a robust 7.8% growth in the April-June quarter, significantly exceeding market expectations.
Revised Growth Projections
The consulting firm now projects GDP growth between 6.7% and 6.9%, averaging 6.8% for the current fiscal year. This represents a 30 basis point increase 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 stated.
Growth Drivers and Economic Momentum
Multiple factors are supporting India’s economic expansion:
- Buoyant domestic demand and improved purchasing power
- Accommodative monetary policy and structural reforms like GST 2.0
- Strong rural consumer confidence and expected farm income growth
- Potential trade agreements with the US and EU by year-end
Rumki Majumdar, Economist at Deloitte India, highlighted that “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 prepare to meet elevated demand.”
Global Risks and Challenges
Despite the positive outlook, Deloitte identified several potential headwinds:
- Escalating trade uncertainties and potential US trade deal delays
- Supply chain disruptions from geopolitical tensions
- Persistent core inflation above 4% since February
- Possible capital outflows if US Fed maintains high rates
Majumdar cautioned that “India is no island, and global risks will inevitably weigh on its economic outlook. This persistent price pressure could constrain the Reserve Bank of India’s ability to pursue further rate cuts.”
Historical Context and Performance
India’s current growth trajectory builds on strong historical performance. The economy grew by 6.5% in 2024-25 and an impressive 9.2% in 2023-24, maintaining its position as the fastest-growing major economy.
The latest upgrade aligns with the government’s Economic Survey projection of 6.3-6.8% growth for 2025-26, though Deloitte’s revised forecast now sits at the upper end of this range.
