Deloitte India on Thursday estimated that the Indian economy will grow between 6.7% and 6.9% in FY26, supported by strong domestic demand and ongoing policy reforms. The economy expanded 7.8% in the April–June quarter, reflecting continued resilience and momentum. According to Deloitte India’s India Economic Outlook report, the country’s GDP is projected to grow by an average of 6.8% this fiscal, marking an upward revision of 0.3 percentage points from its previous forecast. The report highlights that India’s growth trajectory demonstrates both stability and strength, outpacing many other economies. A similar pace is expected in the following year, though uncertainties surrounding global trade and investment could influence the outcome.

The forecast aligns with the Reserve Bank of India’s projection of 6.8% growth for FY26. Deloitte noted that expansion will likely be driven by robust domestic consumption, supportive monetary policy, and structural reforms such as GST 2.0. Additionally, low inflation is expected to enhance consumer spending power. Deloitte India economist Rumki Majumdar observed that the festive quarter will likely see a surge in consumption spending, followed by stronger private investment as businesses adapt to growing demand. She added that a potential trade deal with the US and EU by year-end could further boost investor confidence.

However, Deloitte cautioned that growth remains susceptible to global challenges, including escalating trade tensions and potential delays in trade agreements with major partners like the US. Other risks include restricted access to key minerals and rising inflation in Western economies, which could spill over into India.

Majumdar also pointed out that while headline inflation has eased due to lower food and fuel prices, core inflation remains persistently above 4% since February, limiting the RBI’s room to cut rates. If the US Federal Reserve maintains high interest rates for longer, it could tighten global liquidity and trigger capital outflows from emerging markets, including India. Deloitte emphasized that while recent policies have strengthened domestic demand, the next major step should focus on empowering the MSME sector, which plays a vital role in employment, income generation, exports, and investment.