India's economy is set to grow 6.5% in the current financial year (FY26) on the back of firming domestic consumption and conducive macroeconomic factors, says a report published by Crisil on Monday.
The Crisil Intelligence Near-Term Outlook underscored that though overall economic uncertainty across the world — particularly with regard to fresh U.S. tariffs — remains a major external risk, India growth is expected to be driven by the likes of a healthy monsoon, recent relief on income tax, and RBI monetary policy easing.
Growth is likely to be underpinned by strengthening domestic consumption fueled by an above-average monsoon, income tax cut and RBI MPC's rate reductions," the report added.
India's GDP growth pace gained steam in the last quarter of FY25 to 7.4% on a year-on-year basis from 6.4% recorded in the earlier quarter. For the entire fiscal year, GDP expanded 6.5%.
On the inflation front, the report noted that headline Consumer Price Index (CPI) inflation softened markedly, falling to 2.1% in June — a record low reading in over six years — as much of the fall came from a softening in food prices.
"Going by the trajectory of inflation, forecast of a below-normal monsoon, and the assumption of benign global oil and commodity prices, we project CPI inflation to ease to 4 per cent on average this fiscal from 4.6 per cent previous fiscal," the report added.
Crisil’s outlook also anticipates one additional rate cut by the RBI’s Monetary Policy Committee (MPC) during this fiscal, followed by a pause in further easing as inflation stabilizes.
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