India's Economic Growth Trajectory: Poised to Lead through FY26

India is projected to continue as the fastest growing major economy through FY26, the RBI reports. The report highlights strong macroeconomic fundamentals and financial sectors, while noting potential risks such as global market volatility. Lowered policy rates and a focus on sustainable growth strategies underscore India's economic resilience.

India is set to maintain its status as the fastest growing major economy even into the financial year 2025-26, the Reserve Bank of India (RBI) confirmed on Thursday. A positive inflation outlook combined with moderated GDP expansion suggests that monetary policy will need to be growth-supportive, according to the RBI's annual report.

The report identified a range of risks affecting both the growth and inflation outlook, such as geopolitical tensions, global financial market fluctuations, and trade fragmentation, yet also noted easing supply-chain pressures and favorable monsoons as positive influences on the inflation scenario.

India's trade policies, along with inward remittances and services exports, are positioned to mitigate external headwinds, ensuring a manageable current account deficit. The RBI's confidence in maintaining inflation targets amid existing risks highlights the robustness of India's economic strategies moving forward.

(With inputs from agencies.)