India GDP To Grow 6.5% In FY26, 6.7% In FY27 After GST Cut: S&P

S&P said that a potential India-US trade agreement could significantly reduce uncertainty.

The growth of Indian economy will remain at 6.5 per cent in the current fiscal year (2025-26) and at 6.7 per cent in the following fiscal year (2026-27), according to S&P. The rating agency has estimated that GST cut and relaxation in monetary policy will spur consumption-based growth.

“India’s GDP is expected to grow by 6.5% in FY26 and 6.7% in FY27, with risks evenly balanced,” the ratings agency said in its latest Asia-Pacific economic outlook.

S&P also noted that if India reaches an agreement with the US, it would help boost the investor confidence and reduce uncertainty. “A trade agreement with the US would reduce uncertainty, improve confidence, and give a strong boost to India’s labour-intensive sectors,” the agency added, referring to the ongoing India-US trade deal negotiations.

The latest Q2 FY26 GDP growth data is set to be released at 4 pm on Friday, November 28. According to estimates, the economic growth in July-September 2025 is likely to have grown between 7% and 7.5%.

Rating agencies ICRA and India Ratings have estimated Q2 FY26 GDP growth at 7% and 7.2%, respectively. SBI Research has pegged the economic growth at 7.5%. However, the Reserve Bank of India (RBI) expects the economy to expand by 7% in July-September 2025.

The Reserve Bank of India (RBI) in October MPC revised the real GDP growth projection for this financial year 2025-26 upward to 6.8 per cent from the earlier estimate of 6.5 per cent, showing stronger-than-expected economic performance.

V. Anantha Nageswaran, the chief economic adviser of India, had earlier said that the country will exceed its GDP growth trajectory of 6.8 per cent comfortably in FY26, on the back of GST and income tax relief, stronger private investment and improving foreign inflows.

Nageswaran, while speaking at the CNBC-TV18 Global Leadership Summit 2025, said that he’s comfortable saying even north of 6.8 per cent for India’s growth projection, adding that his original range was 6.3 to 6.8 per cent earlier.