India's FY26 GDP Growth Seen at 6.4-6.7%, Says Deloitte, Citing Strong Domestic Demand and Global Trade Outlook

Mumbai, 5 August 2025: Deloitte India has forecasted India’s Gross Domestic Product (GDP) to grow between 6.4% and 6.7% in FY2025-26, closely aligning with the 6.5% growth recorded in FY2024-25. The outlook is based on steady domestic consumption, improved inflationary trends, and expanding international trade engagements, signalling sustained economic momentum despite global uncertainties.

India’s Growth Outlook for FY26 Pegged at 6.4-6.7% on Domestic Resilience and Global Trade Momentum

In its latest economic report released on Tuesday, Deloitte India highlighted that India’s economy is on a solid upward trajectory, reinforced by what it termed a “virtuous trifecta” – resilient capital markets, a vibrant consumer base, and a globally competitive workforce. The firm underlined that India’s internal strengths are offering a stabilising force against broader international volatility.

Rumki Majumdar, Economist at Deloitte India, noted that India’s growth trajectory remains unique, especially in the face of slowing global trends. “India’s economic trajectory stands out in a turbulent global landscape,” she said.

Trade Agreements with the UK, US, and EU Expected to Drive Job Creation and Boost Market Access

Deloitte highlighted the strategic significance of India’s ongoing trade diplomacy, stating that recent and upcoming international trade agreements will play a vital role in enhancing economic growth. Among these are:

• A completed free trade agreement with the UK (May 2025)
• Ongoing trade negotiations with the United States
• A pending trade agreement with the European Union, which is expected to be finalised by the end of the year

According to the firm, these pacts are expected to improve income levels, enable greater market access, stimulate domestic demand, and facilitate job creation across sectors.

Geopolitical Tensions and Trade Restrictions Could Pose Risk to India’s Economic Momentum

While maintaining an optimistic view, Deloitte also cautioned that geopolitical factors could moderate the growth pace. It flagged increasing global conflicts, particularly those affecting access to critical minerals and specialised fertilisers, as potential risks that could influence India’s trade performance and macroeconomic stability.

The firm advised close monitoring of external trade dependencies, given the rapidly changing global trade dynamics and supply chain realignments.

Trade Deals Pave Way for Innovation in AI, Startups, and Digital Economy

According to Deloitte, emerging sectors such as artificial intelligence (AI), digital transformation, and start-up innovation are gaining renewed traction under the umbrella of these international trade collaborations. These areas are seen as key enablers of India’s future economic strength, supporting the country’s ambition to become a global innovation and technology hub.

The report emphasised that the convergence of economic diplomacy and digital partnerships will be instrumental in shaping India’s long-term competitive advantage.

FY26 Growth to Be Fueled by Consumption, Policy Support, and Expanding Trade Corridors

Looking ahead, Deloitte stated that India’s FY26 economic growth will be underpinned by:

• Sustained domestic consumption
• Strategic and targeted policy initiatives
• Progressive trade diplomacy
• Continued improvement in inflation

The consultancy noted that as inflation moderates and consumer confidence strengthens, the synergy between domestic fundamentals and global opportunities will continue to power India’s economic story.

In conclusion, Deloitte affirmed, “India’s growth story will be driven by a combination of robust domestic fundamentals and expanding global opportunities, amid uncertainties.”

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