Macro View: Indian economy to grow steadily, but risks loom, says Economic Survey

The Indian economy is projected to grow around 6.5% in the medium term, with the possibility of growth accelerating to 7–8% if structural reforms are sustained, says the Economic Survey. Despite global turmoil and geopolitical tensions expected to shape 2026, India continues to stand resilient.

GDP GROWTH OUTLOOK

• FY23: 7.6%
• FY24: 9.2%
• FY25: 6.5%
• FY26: 7.4%
• FY27: 6.8–7.2%

CITING STRONG FUNDAMENTALS AND MOMENTUM

• Large domestic market
• Strong demand
• Strong foreign exchange reserves
• Financialised growth model
• Strategic autonomy

ECONOMIC SURVEY SEES GROWTH NEAR 7%

• India remains one of the fastest-growing major economies
• Growth supported by investment, consumption and reforms

GLOBAL SCENARIO: RISING RISKS

CRYSTAL BALL
Survey maps three global scenarios for 2026 and beyond:

1. Business as Usual (40–45%)

• Global growth continues
• Volatility remains high
• Trade uncertainty persists
• Government intervention continues

2. Disorderly Multipolar Breakdown (40–45%)

• Global coordination weakens
• Geopolitical rivalry intensifies
• Supply chains fragment
• Sanctions rise

3. Systemic Shock Scenario (10–20%)

• Major financial shock
• Geopolitical and trade crisis
• Could resemble or exceed the 2008 global financial crisis

KEY RISKS HIGHLIGHTED

Disruption of capital flows
Impact on rupee
Supply chain disruptions
Rising import bill
Global financial market stress

HOW INDIA CAN RESPOND

IT PROPOSES SEVERAL MEASURES TO DE-RISK THE ECONOMY

• Supply chain stability
• Creation of buffer reserves
• Diversification of routes
• Export competitiveness
• Attracting investors
• Increasing export earnings

Despite global uncertainties, India’s strong fundamentals, large domestic market, and ongoing reforms place it in a stable position. However, the Economic Survey cautions that global shocks, geopolitical tensions, and financial volatility remain key risks, making careful policymaking essential in the coming years.