Overview

• Real GDP grew 7.8% year on year in April–June, up from 7.4% in the prior quarter and above Fitch’s earlier 6.7% projection.
• The agency expects growth to moderate to 6.3% in FY27 and 6.2% in FY28 as the economy runs slightly above potential.
• Fitch projects a 25-basis-point RBI rate cut late in 2025, with rates held through 2026 before tightening begins in 2027.
• Rising US trade frictions, including a recent additional 25% tariff on some Indian imports, are cited as downside risks to sentiment and investment.
• Fitch warns weak price pressures may be overstating real growth even as it nudges 2025 global growth to 2.4%, notes clearer US slowdown signs, and expects two Fed cuts this year.