Deloitte Projects Strong GDP Growth for FY26
Deloitte India has revised its Gross Domestic Product (GDP) growth forecast for India for the financial year 2025-26 upwards to an average of 6.8%, ranging between 6.7-6.9%. This projection, a 0.3 percentage point increase from its previous forecast, aligns closely with the Reserve Bank of India's (RBI) estimate of 6.8% for the same period. The growth is primarily attributed to buoyant domestic demand, an accommodative monetary policy, and ongoing structural reforms, including the anticipated 'GST 2.0'. Low inflation is expected to further contribute to increased spending and improved purchasing power. Economist Rumki Majumdar of Deloitte India highlighted that consumption spending during the festive quarter is likely to fuel demand, followed by strong private investment as businesses prepare for elevated demand.
Indian Economy Displays Resilience Amid Global Headwinds
The Reserve Bank of India's October monthly bulletin underscored the Indian economy's resilience despite heightened global uncertainties. High-frequency indicators point towards a revival in urban demand and robust rural demand. Notably, the headline Consumer Price Index (CPI) inflation moderated sharply in September, reaching its lowest reading since June 2017. The agricultural sector continues its growth momentum, supported by above-normal rainfall and increased kharif sowing, while business confidence in manufacturing and services has reached a six-month peak.
Major Overhaul of Economic Indicators Planned for Early 2026
India is set to implement a significant revamp of its key economic indicators in early 2026. This overhaul will include updates to GDP data (based on 2022-23 prices), retail inflation (with a 2023-24 base), and the industrial production index (with a 2022-23 base). Crucially, a new index for the services sector, which constitutes a major portion of the economy, will be introduced for the first time. These changes aim to provide a more accurate and contemporary picture of how Indians earn, spend, and consume, addressing gaps in existing data and reflecting the growing importance of the digital economy and services.
Prospects of India-US Trade Pact Boost Export Stocks
Reports indicating that an India-US trade pact with lower tariffs might be imminent have led to a significant surge in shares of top Indian exporters, particularly in the Information Technology (IT) and textile sectors. This potential deal could see US tariffs on Indian imports decline substantially, from current levels to around 15-16%. Analysts view this as a strategic shift that could strengthen India's position in global trade and provide a multi-year boost to exports.
Conflicting Stances on Russian Oil Imports and EU Sanctions
In a development reflecting ongoing geopolitical dynamics, the White House reiterated its claim that India is cutting Russian oil imports at the request of the US President. However, India has denied any such agreement, emphasizing that its energy policy prioritizes safeguarding consumer interests and ensuring stable, secure supplies. Separately, the European Union has imposed sanctions on three India-based firms as part of its 19th package of measures against entities linked to Russia.