Fitch Ratings Raises India's Growth Forecast Amid Global Trade War

Fitch Ratings has adjusted India's GDP growth projections to 6.5% for FY25-26 and 6.3% for FY26-27, citing India's relative insulation from the US-led global trade war. Robust agriculture, consumer confidence, and government spending are poised to bolster India's economic resilience.

Fitch Ratings has adjusted its growth forecast for India, projecting a 6.5% increase in GDP for FY25-26, followed by 6.3% for FY26-27. These projections were outlined in the March edition of the Global Economic Outlook, highlighting India's robustness amidst the US-induced global trade conflict.

The report notes that India's economy experienced a recovery in the fourth quarter of FY25, with GDP growth rising to 6.2% from the previous 5.4% in the third quarter. This upturn is attributed to increased domestic consumption and higher capital expenditures.

Fitch emphasizes the significant role of agriculture in this growth, aided by favorable monsoon rains. Moreover, business confidence remains high, with bank lending reports indicating strong growth. Despite a dip in consumer sentiment and vehicle sales, lower inflation is expected to enhance real incomes and drive further expansion.

(With inputs from agencies.)