India’s Real GDP Growth at 6.7% for This Fiscal Year: Report

Global professional services organization EY on Monday upgraded India's real GDP growth estimate for FY26 to 6.7 per cent, up from its earlier 6.5 per cent, due to the strong boost from GST 2.0 reforms.

The upgrade follows expectations of monetary easing and improved domestic demand spurred by GST rate rationalisation despite ongoing global uncertainties, says EY's Economy Watch September edition.

With Q1 FY26 real GDP growth of 7.8 per cent and encouraging the demand stimulus by way of GST reforms on the one hand, and being restricted by global headwinds impacting India's export opportunities in goods and services on the other hand, we expect India to nonetheless register an annual real GDP growth of 6.7 per cent in FY26," the report added.

DK Srivastava, EY India's Chief Policy Advisor, further contributed, "With GST 2.0 reforms driving disposable incomes and domestic demand and trade diversification efforts providing new opportunities, India is well placed to continue its growth momentum in FY26. Key investments in technology and calibrated policy interventions will be important to turn reforms into sustainable economic gains.

These trends are supported by recent economic indicators. In August 2025, the services PMI improved to 62.9, the strongest reading since June 2010, while the manufacturing PMI increased to 59.3, its best since February 2008.

Total IIP growth increased to 3.5 per cent in July 2025 from 1.5 per cent in June 2025, led by a sharp rise in manufacturing output.

"Driven by waning base effects and a moderation in the rate of contraction in food prices, CPI inflation rose from 1.6 per cent in July 2025 to 2.1 per cent in August 2025 while core CPI inflation also went up from 4.2 per cent to 4.3 per cent over the same period," added the report.

WPI inflation became positive at 0.5 per cent in August 2025, as against (-)0.6 per cent in July 2025, driven by higher vegetable prices on account of weakening base effects and a rise in tomato prices.

India's robust performance among all countries worldwide was highlighted by the OECD, as it stated that India's seasonally adjusted quarterly real GDP growth at 7.3 per cent during April–June 2025 was the strongest among all G20 countries.