Deloitte Forecasts 6.4–6.7% GDP Growth for FY26, Cites Strong Consumption and Policy Support

Deloitte India has revised its full-year GDP growth forecast for FY26 to a range of 6.4%–6.7%, slightly lower than its previous projection of lower than 6.7%. The revision reflects heightened uncertainty owing to global trade tensions, heightened geopolitical risks, and tariff impacts—yet the firm emphasises that strong domestic fundamentals and expanding global opportunities continue to underwrite India’s momentum. 

Key Growth Drivers: Resilient Domestic Demand & Policy Support

Deloitte attributes India’s underlying resilience to its consumption-led model, where private final consumption accounted for over 61% of GDP in FY25. While government capital expenditure and emerging private investment support growth, easing inflation and rising consumer activity underpin robust expansion.

External Risks and Trade Volatility

The tempered lower-end forecast is driven by external headwinds—particularly the US’s 25% tariffs on Indian exports, along with regional conflicts and restrictions on critical minerals and fertilisers, which may dampen export growth and trade access. Deloitte cautions India to closely monitor its trade exposure and prepare for evolving geopolitical developments.

Strategic Trade Deals as Catalysts

Deloitte highlights that ongoing and future trade negotiations—including recent talks with the UK, the ongoing US dialogue, and a potential EU agreement—could serve as powerful multipliers for jobs, income, market access and domestic demand. These agreements may unlock new export and investment avenues.

Capital Markets, Talent and Demographics

The consultancy notes India’s advantage in a digital and skilled workforce, including 2.5 million annual STEM graduates, and robust global-capability centres. India’s capital markets remain strong, with a market cap-to-GDP ratio of 136%, one of the highest globally. These factors add to its economic edge even in turbulent times. 

Quarterly Trends & Peer Comparisons

India’s GDP expanded by 7.4% year-on-year in Q4 FY25, supported by construction and manufacturing strength, leading to an overall annual rate of 6.5%—the highest among major economies. Analysts expect growth to moderate to the 6% range in FY26, aligning with peer projections. 

Conclusion

Deloitte’s growth projection underscores India’s sustained resilience amid global challenges. With domestic consumption, capital markets, and a skilled workforce driving momentum, India appears well-positioned for FY26. Strategic trade accords stand to amplify growth, provided policy support continues and global uncertainties are managed. Robust performance in FY25 lays a solid foundation for navigating FY26 and beyond.