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Informist, Friday, Mar. 13, 2026

 

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--Fitch: See India FY26 GDP growth at 7.5% 
--Fitch: See India FY26 GDP growth at 7.5%, driven by domestic demand 
--Fitch: See some signs of India economic activity slowing in Jan-Feb 
--Fitch: Expect growth in India to moderate in Apr-Sept 
--Fitch: See India GDP growth slowing to 6.7% in FY27, 6.5% in FY28 
--Fitch: See India inflation rising steadily to 4.5% by December 
--Fitch: Higher oil prices can push India inflation up faster than expected 
--Fitch: Expect interest rates in India to remain steady in FY27, FY28

 

NEW DELHI – Fitch Ratings Friday raised its forecasts for India's GDP growth over the next two financial years by 30 basis points each, even as the pace of economic expansion is seen slowing down from 2025-26 (Apr-Mar). 

 

The rating agency projects India's GDP to grow 7.5% in the current financial year, 10 bps slower than the government's second advance estimate of 7.6%. Fitch then sees growth slowing to 6.7% in FY27 and further down to 6.5% in FY28. Earlier, Fitch had projected the economy growing 6.4% and 6.2% in FY27 and FY28, respectively. 

 

India's economy expanded 7.8% in the December quarter, based on the new GDP series with FY23 as the base year. 

 

"Domestic demand is the biggest growth driver this year, with consumer spending and investment rising by (an estimated) 8.6% and 6.9% in the current fiscal year," Fitch said in its Global Economic Outlook for March.

 

"There are tentative signs that real activity is slowing in January and February, for example in the PMI (Purchasing Managers' Index) surveys, but the economy remains resilient, and credit growth is still in double digits," Fitch said. Growth is likely to moderate in the first six months of FY27, with rising inflation expected to constrain real incomes, limiting consumer spending growth, the rating agency said.

 

Investment growth in India will ease in the short term but should recover from the second half of FY27 with looser financial conditions and lower real interest rates, Fitch said.

 

Fitch said the US Supreme Court's decision to remove US President Donald Trump's reciprocal tariffs and the subsequent 10% tariff on imports would support external demand in India.

 

Price pressures have started to build up in India, Fitch said, adding that CPI inflation is seen rising to 4.5% by December. "Persistently higher oil prices could cause inflation to rise faster than the expected gradual pace," Fitch said. CPI inflation rose to 3.21% in February from 2.74% in January.

 

Fitch expects the Reserve Bank of India's Monetary Policy Committee to keep the repo rate at 5.25% in FY27 and FY28. The setting panel lowered the repo rate by 125 bps in 2025 but held it at 5.25% in February.  End

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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