S&P raises India growth forecast for FY26 to 6.5%

S&P Global Ratings on Tuesday raised its forecast for India's gross domestic product (GDP) growth in the current fiscal year to 6.5%, up from 6.3%, citing expectations of a normal monsoon, income-tax concessions, lower crude oil prices, and monetary easing. In its latest Asia-Pacific Economic Outlook, S&P said India's domestic demand resilience and low dependence on goods exports will help limit the impact of global headwinds on its economy.

"We see India's GDP growth holding up at 6.5% in fiscal 2026. That forecast assumes a normal monsoon, lower crude oil prices, I-T concessions and monetary easing," S&P said. It sees India's economy to grow 6.7% next year.

S&P's projection is in line with the Reserve Bank of India's FY26 GDP forecast of 6.5%.


S&P also raised GDP growth estimate for China to 4.3% in 2025 from 3.5% in the last round of forecasts.

"Asia-Pacific economies face sizeable external challenges, notably from uncertain US tariff policy and soft imports in China," S&P chief economist Louis Kuijs said. "We expect domestic demand to remain relatively resilient. The extent to which resilient domestic demand can limit a slowdown this year and next varies across the region, with the export-dependent economies more at risk." S&P highlighted increasing concerns for global economy due to West Asia unrest, and said sustained high oil prices could significantly impact Asia-Pacific through reduced global growth and strain on current accounts of energy-importing nations, affecting prices and expenses.