India GDP likely to grow at 7.5% in FY26: Report

India’s real gross domestic product (GDP) is likely to grow at 7.5 per cent in FY26 and moderate to 7 per cent in the subsequent fiscal year, a domestic rating agency said on Wednesday.

The rupee, which is hitting lifetime lows lately and has breached the 91-mark, will appreciate and is expected to be at the 89-90 level in FY27, according to Careedge Ratings. “India’s macroeconomic outlook remains constructive heading into FY27. Even with external uncertainties lingering, the Indian economy is expected to record healthy growth of 7 per cent in FY27,” its chief economist Rajani Sinha said.

The growth momentum will be supported by factors like comfortable inflation, lower interest rates and lower tax burden, Sinha said, adding that a likely US-India trade deal would provide further impetus.

The agency feels the capital expenditure cycle is showing “early signs of revival” as reflected by strong growth in the order book of capital goods companies. The jump in gross FDI (foreign direct investment) inflows suggests that the country’s growth is being taken note of by overseas investors, it said, adding that market reforms like the new labour code will give further confidence to domestic and global investors.

After the impressive show in the first half of FY26, the GDP rise is likely to moderate to 7 per cent in H2, but will maintain a growth of 7.5 per cent for the full fiscal, it said, attributing the moderation to the impact of fading export front-loading and normalisation of consumption after festivities.

The agency said India’s goods exports are set to contract by around 1 per cent in FY26 compared to a growth of 0.1 per cent in FY25 and pointed to a decline in merchandise exports to the US across categories.