Fitch Raises India FY26 GDP Forecast

Fitch Ratings has raised India's GDP growth forecast for the current fiscal year (FY26) to 7.4% from 6.9%, attributing this to robust private consumer spending, improved sentiment, and the positive impact of Goods and Services Tax (GST) reforms. The agency noted that falling inflation provides the State Bank of India (RBI) room for one more policy rate cut in December, bringing the rate to 5.25% after 100 basis points of cuts in 2025. While growth is expected to moderate in subsequent years, domestic demand, particularly consumer spending, is projected to remain the primary driver. Fitch also highlighted that India faces high effective tariff rates on its exports to the United States, suggesting a trade agreement could enhance external demand.