India's economy is projected to grow between 6.5% and 6.8% this fiscal year, with an anticipated increase to 6.7% to 7.3% in FY2026, according to Deloitte. Despite challenges in the first half of FY2025, such as election uncertainties and geopolitical tensions, the economy remains resilient. Key strengths include domestic consumption and high-value manufacturing exports. The government’s focus on infrastructure, digital transformation, and attracting foreign investment supports this growth. As the Union Budget for FY2025 approaches, investments in skills and manufacturing are expected to be prioritized.
India's economy is on a promising trajectory, with projections indicating growth between 6.5% and 6.8% for the current fiscal year. According to a recent Deloitte report, this growth is expected to slightly increase to a range of 6.7% to 7.3% in FY2026. Despite facing challenges in the first half of FY2025, including election uncertainties, heavy rainfall, and geopolitical tensions, the resilience of India’s economy shines through.
Deloitte India Economist Rumki Majumdar noted the strength of key economic areas, stating, “India’s consumption trends, services sector growth, and the rising share of high-value manufacturing exports, such as electronics, semiconductors, and chemicals, demonstrate the country’s growing strength in global value chains.”
The government’s commitment to infrastructure development, digital transformation, and attracting foreign direct investment (FDI) is poised to enhance economic efficiency and growth prospects. Even with the Reserve Bank of India's recent adjustment of its growth forecast from 7.2% to 6.6%, India is expected to maintain a positive growth outlook.
Deloitte also highlighted the resilience of India's capital markets, which have remained stable despite notable outflows from foreign institutional investors (FIIs). This stability is bolstered by increasing participation from domestic and retail investors.
“Domestic consumption will remain the cornerstone of India’s economic growth, with both rural and urban demand playing crucial roles,” Majumdar emphasized. She added that government initiatives, social welfare programs, and advancements in digitization are likely to stimulate consumption spending further.
While India may face various global challenges such as geopolitical tensions and trade disputes, Majumdar remains optimistic. She pointed out that the country’s growth will hinge on its capacity to navigate global uncertainties while leveraging its demographic advantages and expanding middle class.
“By focusing on workforce development, self-reliant manufacturing, and advancing digital services, India can capitalize on opportunities even amid global deglobalization trends,” Majumdar stated.
As the Union Budget for FY2025 approaches, attention will be on the government's policy measures, which are expected to emphasize investments in skill development, self-reliance in manufacturing, and enhancing India’s role in global value chains.
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