India Set for Strong Economic Growth in FY26 with 6.4–6.7 percent Forecast: Deloitte

India’s economy is projected to grow between 6.4 percent and 6.7 percent in the financial year 2025–26, according to Deloitte India. The consultancy attributes this optimistic outlook to strong domestic fundamentals, steady consumer demand, and expanding global trade opportunities. This forecast follows a 6.5 percent growth rate recorded in FY 2024–25, reflecting the country’s continued economic resilience.

Deloitte highlighted several factors supporting this momentum, including easing inflation, proactive government policies, and a push for greater participation in global trade. The report noted that India’s economic performance remains stable despite global volatility, driven by what Deloitte describes as a “virtuous trifecta” of resilient capital markets, a dynamic consumer base, and a globally competitive workforce.

Ongoing trade negotiations with major economies such as the United States, the United Kingdom, and the European Union are expected to further boost growth. These strategic partnerships are likely to enhance income levels, create employment opportunities, improve market access, and stimulate domestic demand. In addition to traditional trade benefits, the agreements are also expected to pave the way for collaboration in advanced sectors like artificial intelligence, digital transformation, and innovation-driven startups.

Despite the positive outlook, Deloitte has cautioned that India must stay vigilant about external risks. Geopolitical tensions, particularly in regions critical to global supply chains, could impact access to essential resources, including vital minerals and specialized fertilizers. These disruptions may pose challenges to the broader growth narrative if not managed carefully.

Separately, Morgan Stanley recently projected that India is on track to become the world’s third-largest economy by 2028, with its GDP expected to more than double to $10.6 trillion by 2035. By then, states like Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnataka could each approach the $1 trillion GDP mark. As of May 2025, India has already surpassed Japan to become the fourth-largest economy globally, with a GDP of $4.187 trillion, according to IMF data.