S&P Global Raises India’s GDP Growth Forecast To 6.5% For FY26

S&P Global on Tuesday raised India’s GDP growth forecast for the current financial year to 6.5%, up from its earlier estimate of 6.3%. The global rating agency cited factors such as monetary easing, lower crude oil prices, and expectations of a normal monsoon.

In its Asia-Pacific Economic Outlook report, S&P Global said domestic demand in India is likely to remain stronger than export performance. The new projection aligns with the Reserve Bank of India’s estimate.

“We see India’s GDP growth holding up at 6.5% in fiscal 2026 (year ending March 31, 2026). That forecast assumes a normal monsoon, lower crude oil prices, income-tax concessions and monetary easing,” the report stated.

RBI and S&P in sync on growth estimates

The Reserve Bank of India’s Monetary Policy Committee, earlier this month, also projected India’s GDP growth at 6.5% for 2025–26. It estimated quarterly growth at 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4.

While S&P warned of global economic risks due to ongoing geopolitical tensions in West Asia, it ruled out a long-term spike in oil prices. “Current conditions on global energy markets, which are well-supplied, make such long-term impact on oil prices unlikely,” the agency added.

Oil prices had surged in recent weeks over fears of the Strait of Hormuz being closed amid the Israel-Iran conflict. However, prices dropped by around 5% on Tuesday after a ceasefire deal between Israel and Iran, brokered by US President Donald Trump.

Interestingly, S&P Global had reduced India’s growth estimate to 6.3% last month, citing uncertainty over US trade policy. The latest revision restores the forecast to its earlier level of 6.5%.

Other global organisations remain cautious. The World Bank, in its Global Economic Prospects report this month, lowered India’s growth estimate to 6.3%, citing weak external demand and rising trade barriers.

In April, the International Monetary Fund (IMF) also revised India’s growth projection downward to 6.2%, cutting it by 30 basis points.

As per data from the National Statistics Office, India posted a GDP growth of 6.5% in the year ending March 2025. It was the slowest expansion since the Covid-hit year of 2020–21.

Despite the moderation, India continues to be the fastest-growing major economy in the world.

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