India's GDP Outlook Upgraded: RBI Projects 6.8% Growth For FY26

With good monsoon and GST rate rationalization, the Reserve Bank of India (RBI) has revised the growth projections for FY 26 upwards. The gross domestic product (GDP) growth forecast for FY26 has been revised upward to 6.8 per cent, with quarterly estimates of 7 per cent in Q2 as against 6.7 per cent announced earlier, 6.4 per cent in Q3 as compared to 6.6 per cent earlier, and 6.2 per cent in Q4 as against 6.3 per cent projected earlier.

Growth for Q1 of the next financial year FY27, is projected at 6.4 per cent as against 6.6 per cent earlier.

The growth projections in Q3, Q4 and Q1 of FY27 was revised downwards partly due to 50 per cent tariffs by US on Indian imports.

RBI Governor Sanjay Malhotra said US tariffs will moderate exports however he added that government policy steps may offset some impact of global headwinds.

The governor noted that the implementation of several growth-inducing structural reforms, many of which were announced by the PM Modi on 15 August, including the streamlining of GST, are expected to offset some of the adverse effects of the external adverts.

Taking all these factors into account, the governor stated that "real GDP growth for this year is now projected at 6.8 per cent. This is a revision from our earlier forecast of 6.5 per cent. Q2 now is projected at 7 per cent, Q3 at 6.4 per cent and Q4 at 6.2 per cent. Real GDP growth for Q1 next year is projected at 6.4 per cent. The risks are evenly balanced".

In the last policy announcement despite the uncertain global trade environment due to ongoing tariff announcements and trade negotiations, the Reserve Bank of India (RBI) had kept the GDP growth projection for the current financial year 2025-26 unchanged at 6.5 per cent which is now revised upward to 6.8 per cent.

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)

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