Overview

• Crisil has reaffirmed a 6.5% growth forecast for FY26 after industrial output slowed to a ten-month low of 1.5% in June.
• PwC India projects 6.5% expansion driven by recent income-tax cuts, lower interest rates and improving urban demand that should boost Q2 corporate earnings.
• The Reserve Bank of India’s 100-basis-point repo rate cuts this year are translating into softer lending rates, with analysts expecting another 25–50 basis-point reduction later in the fiscal.
• Rainfall 7% above the long-period average is likely to ease food inflation and support rural consumption by freeing up household budgets for discretionary spending.
• Intensifying external headwinds, including potential U.S. reciprocal tariffs and a slowing global economy, remain key downside risks to exports and investment.