Overview

• India’s real GDP rose 7.8% year-on-year in April–June, outpacing the prior quarter’s 7.4% on robust services activity and resilient consumption.
• Fitch says domestic demand will drive growth, with recent GST changes expected to modestly lift consumer spending.
• Growth is projected to ease to 6.3% in FY27 and 6.2% in FY28 as the early-year impulse fades.
• Fitch expects the RBI to cut the policy rate by 25 basis points near year-end, hold steady through 2026, and begin tightening in 2027.
• Key risks include new US trade barriers—an additional 25% tariff on Indian imports—and a warning that weak prices may overstate real GDP relative to nominal measures.