New Delhi, September 10, 2025 — In a notable upward revision, Fitch Ratings has raised India’s gross domestic product (GDP) growth forecast for the financial year 2025–26 to 6.9%, up from its previous estimate of 6.5%. The revision reflects the rating agency’s confidence in India’s resilient domestic demand, robust capital spending, and improving macroeconomic fundamentals.
According to Fitch’s latest Global Economic Outlook, the Indian economy is expected to maintain its momentum despite global headwinds, including trade policy uncertainties and slowing growth in major economies such as the United States and China. The agency cited several key drivers behind the upgrade:
- Domestic Consumption: Consumer spending is projected to remain strong, supported by lower inflation, steady employment growth, and recent tax reforms that have increased post-tax incomes.
- Capital Expenditure: Business confidence remains high, and bank lending to the private sector continues to grow at double-digit rates. These factors are expected to fuel a pickup in capital investment over FY26 and FY27.
- Policy Support: The Reserve Bank of India’s monetary easing, including a recent 25 basis point cut in the repo rate, is anticipated to reduce the cost of capital and stimulate economic activity.
- Net Exports: While net exports contributed positively to GDP growth in FY25, Fitch expects their impact to normalize in FY26, with a broadly neutral contribution to overall growth.
Fitch also noted that India’s low reliance on external demand provides a buffer against global trade volatility. The agency expects real GDP growth to accelerate to 7.1% in Q4 FY25 and 6.8% in Q1 FY26, before stabilizing around the revised annual forecast.
The upgrade positions India as one of the fastest-growing major economies globally, reinforcing its role as a key driver of regional and global growth. The forecast revision comes amid broader optimism about India’s economic trajectory, with other agencies such as the Asian Development Bank and S&P also projecting robust growth in the medium term.
