India’s economy is set to grow by 6.7% in FY2025-26, driven by strong domestic demand, rising rural incomes, and easing inflation, according to the Asian Development Bank (ADB) April 2025 outlook. Growth is expected to edge up to 6.8% in FY27, supported by tax incentives, infrastructure investments, and robust services and agriculture sectors.
While the RBI has trimmed its growth forecast to 6.5% for the current year, it has also cut the repo rate to 6% to support the economy—its second rate cut this year.
Key growth drivers include :
- Boosted consumer confidence from lower inflation (4.3% projected for FY26)
- A rebound in manufacturing
- Expansion in health, education, and business services
- Government’s ₹100 billion push for urban infrastructure
Risks remain from global uncertainties, including new US tariffs and volatile commodity prices, but India’s stable macro fundamentals offer a strong buffer.