India GDP Growth Outlook for FY26

Deloitte India’s latest economic outlook projects the country’s GDP to grow between 6.7% and 6.9% in FY26. This reflects a slight moderation from FY25 but still positions India as one of the fastest-growing major economies globally.

The report highlights domestic consumption, infrastructure expansion, and private investments as key drivers of growth. Rising disposable incomes, steady employment, and improving consumer confidence continue to keep urban demand strong. In addition, ongoing public and private capital expenditure is supporting sectors like construction, logistics, and renewable energy, reinforcing an investment-led growth cycle.

Domestic Strength to Drive Growth

India’s growth resilience is largely attributed to robust domestic demand and steady investment momentum. Policy reforms supporting manufacturing and private investment, alongside programs such as ‘Make in India’ and the Production Linked Incentive (PLI) schemes, are strengthening productivity and long-term economic stability.

Urban consumption remains a critical growth engine, while infrastructure projects and industrial expansion create jobs and boost economic activity across multiple sectors.

Global and Structural Challenges

Despite a positive outlook, Deloitte cautioned that external factors could pose short-term risks. Sluggish global demand, geopolitical tensions, and weak exports may affect growth. Additionally, inflationary pressures linked to commodity prices and monsoon variability could impact rural consumption and food inflation.

However, structural reforms, digital infrastructure development, and investment in technology and manufacturing are expected to support medium-term economic resilience.

Sectoral Performance

Deloitte identifies manufacturing, real estate, IT, and financial services as the main growth drivers for FY26. Agriculture, vital for employment and rural income, will largely depend on monsoon performance, which influences food prices and overall price stability.

Investment-led growth and structural reforms are expected to reinforce performance across these sectors, ensuring balanced economic development.

The Big Picture

Deloitte’s forecast aligns closely with other institutions: the IMF projects 6.8%, while the RBI expects around 7% growth for FY26. These projections underline India’s strong macroeconomic fundamentals, fiscal discipline, and policy stability.

The government’s continued focus on infrastructure, technology, and industrial competitiveness is expected to sustain growth momentum throughout the fiscal year.

Final Word

Deloitte’s GDP forecast of 6.7–6.9% reinforces India’s position as a global growth leader. While challenges like monsoon variability and weak global demand remain, the country’s investment-driven, reform-focused growth model provides a solid foundation for continued economic expansion.

With ongoing digital innovation, infrastructure development, and fiscal prudence, India is well poised to maintain its trajectory as one of the world’s most dynamic and resilient economies in FY26.

Sources

Deloitte India Economic Outlook (October 2025)

Reserve Bank of India (RBI)

International Monetary Fund (IMF).