CEA Affirms Commitment to 6.3-6.8% Growth Forecast for FY26
India’s Chief Economic Adviser Projects 6.3–6.8% GDP Growth for FY26
The Chief Economic Adviser of India has reiterated the forecast for the country’s GDP growth for the fiscal year 2026 at 6.3–6.8%. He pointed to robust industrial activity, a rebound in rural consumption, and resilient exports as key factors supporting this projection. Furthermore, falling oil prices and stable FDI inflows contribute to the overall optimism, with India poised to become the world’s fourth-largest economy.
Economic Outlook for India
Despite facing global challenges, India achieved a 6.5% GDP growth in FY25, prompting Chief Economic Adviser Anantha Nageswaran to maintain the growth forecast for the current fiscal year. The resurgence of private consumption, especially in rural areas, and the strength of services exports are expected to drive economic growth. Various agencies have also predicted a growth rate ranging from 6.3% to 6.7% for FY26.
Factors Driving Growth
Nageswaran highlighted strong industrial and commercial activities in April 2025, as well as favorable food inflation due to a successful rabi harvest and healthy monsoon conditions. The government’s efforts to attract more foreign direct investment, combined with increased capital investment by the private sector, are seen as crucial for achieving higher growth rates.
Positive Domestic and External Factors
India’s export performance remains robust despite global trade uncertainties, with merchandise trade growth improving and service sector surplus continuing to grow. The recent decline in oil prices and expectations of further production increases by oil-producing nations bode well for India’s fiscal and consumption outlook.
Future Prospects and Challenges
As India aims to surpass Japan and become the fourth-largest economy in FY26, maintaining a stable growth environment supported by monetary and fiscal policies is crucial. Nageswaran also noted the impact of diverging central bank rate paths globally on capital flows and financial markets, emphasizing the need for stability in the external environment to sustain FDI inflows.
