Indian Economy Set To Grow 6.5% In FY26 Despite Global Challenges: EAC-PM Chief S Mahendra Dev

The Indian economy is projected to grow at 6.5% in FY2025–26, supported by strong domestic fundamentals despite global uncertainties, according to S Mahendra Dev, Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM).

Speaking on Tuesday, Dev said India’s resilience stems from a favourable policy environment, declining inflation, and robust domestic demand.

“There are significant global headwinds, including geopolitical tensions and trade policy uncertainties. However, the Indian economy remains resilient and continues to be the fastest-growing among large economies,” he stated.

Dev attributed the 6.5% growth projection to low inflation aided by a favourable monsoon and a benign interest rate regime, following three consecutive rate cuts by the Reserve Bank of India (RBI). High-frequency indicators for the first two months of FY26 signal strong domestic activity, he noted.

“A 6.5 per cent GDP growth for FY26 is feasible despite global uncertainties. India’s medium-term growth outlook remains strong, underpinned by sound fiscal management,” Dev said.

He further added that rising public capital expenditure and strong private consumption will play a key role in sustaining economic momentum through the year.

However, global institutions remain cautious. The International Monetary Fund (IMF) recently lowered India’s growth forecast to 6.2%, while the World Bank cut its estimate to 6.3%, citing increased global risks and trade disruptions.

India’s economy grew by 6.5% in FY2024–25, retaining its position as one of the fastest-growing major economies worldwide.

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