Deloitte Sees India GDP at Up to 7.8% in FY26, Slowing in FY27

India’s economy is projected to grow at a robust pace of 7.5–7.8 per cent in the current fiscal year (FY2025-26), before moderating to 6.6–6.9 per cent in FY2026-27, according to Deloitte India. The growth outlook reflects strong domestic demand, resilient services activity and supportive policy measures, even as global uncertainties persist.

Deloitte noted that 2025 is shaping up to be a year of “resilience” for India, marked by steady domestic consumption, decisive fiscal and monetary reforms, labour policy initiatives and a recalibration of trade strategy. Despite global headwinds such as trade disruptions, volatile capital flows and policy shifts in advanced economies, India’s real GDP expanded by 8 per cent in the first half of the ongoing fiscal year (April–September).

For the full FY26, growth is expected to be supported by festive season demand, easing inflation and continued strength in the services sector. Policymakers responded early to emerging external risks in 2025 by introducing tax exemptions, cutting policy rates and rationalising the GST framework to stimulate consumption. Favourable inflation trends further boosted purchasing power and economic momentum.

According to Deloitte India economist Rumki Majumdar, India’s performance reflects sustained pro-growth policies rather than chance. She said that with demand-side measures largely in place, the policy focus in 2026 is likely to shift towards supply-side reforms. Key priorities will include strengthening MSMEs and developing tier-2 and tier-3 cities as new growth engines.

Trade diplomacy has also played a critical role. India signed free trade agreements with the UK, New Zealand and Oman, initiated negotiations with Israel, and operationalised the EFTA deal in 2025. These moves aim to diversify export markets, expand India’s services footprint beyond the US and enhance investor confidence.

India has also deepened economic engagement with emerging economies across Asia, Africa and the Middle East, aligning with the broader Global South trade shift. While external risks remain elevated, Deloitte expects the proposed India–US trade deal to conclude by the end of FY26, potentially reviving foreign investment and stabilising the rupee.