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Informist, Wednesday, Nov. 26, 2025

 

NEW DELHI – BMI, a Fitch Solutions company, has raised its forecast for India's GDP growth in the current financial year by 50 basis points to 6.5?cause of strong a economic performance expected for the September quarter, data for which will be released on Friday. BMI also raised the growth forecast for FY27 by 30 bps to 6.1% citing favourable changes in macroeconomic policies and pegged economic growth at 6.9% for both FY28 and FY29.

 

In a report, BMI said that the recently released high-frequency data such as industrial production and new vehicle registrations showed favourable picture of India's economy for the September quarter. "The uptick in performance was due in large part to the government streamlining the goods and services tax (GST) system in September. Aside from making many items cheaper, the GST reforms also improved ease of doing business and likely reduced policy uncertainty significantly," BMI said.

 

The Fitch Solutions company sees September quarter GDP growth at 7.9%, much higher than the economists' and Reserve Bank of India's projections. The central bank projects GDP growth at 7.0% in Jul-Sept while economists polled by Informist pegged it at 7.2%. The statistics ministry will release Jul-Sept GDP data at 1600 IST on Friday. The economy had risen 7.8% in the June quarter. BMI's growth forecast for FY26 is lower than the RBI's projection of 6.8%.

 

According to BMI, the effects of GST rate changes persisted through the Diwali period in October but will fade by the March quarter. "US tariffs on Indian exports implemented in August will start to meaningfully impact exports later in the year. These factors explain why the full fiscal year forecast is significantly lower than the Q2 nowcast," the report said.

 

For next year, BMI raised the growth projection to 6.1% from 5.8% on expectations of higher government spending and a rise in consumption and investment supported by interest rate reductions by the RBI's Monetary Policy Committee. Fresh artifical intelligence-related investment in India will also partly offset the growth-reducing impact of US' 50% tariffs on India, BMI said. "Finally, the US-led AI (artificial intelligence) boom will almost certainly increase investments into new data centres in India."

 

The full impact of the US' tariffs on India will take place in FY27, BMI said. Even if India succeeds in negotiating a substantially lower tariff rate, it will likely come at the cost of foregoing cheap oil from Russia, BMI said. "This external dynamic serves as a brake on India's economy, contributing to a projected 0.4pp (40 bps) growth slowdown between FY2025/26 and FY2026/27."  End

 

Reported by Shubham Rana

Edited by Vandana Hingorani

 

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