Ind-Ra Revises India's GDP Growth Projection Amid Global Shifts

India Ratings and Research (Ind-Ra) has raised India's GDP growth projection for the current fiscal to 7%, citing high growth in the June quarter and reduced impact of US tariff hikes. The revised forecast reflects improved inflation rates and potential positive effects from global trade dynamics.

In a significant revision, India Ratings and Research (Ind-Ra) has adjusted India's GDP growth forecast for the current fiscal year to 7% from a previous 6.3% estimate. This upward revision follows the high growth rate of 7.8% recorded in the April to June quarter, and a more favorable-than-expected global trade environment despite US tariff hikes.

According to Ind-Ra's chief economist, Devendra Kumar Pant, changes in both domestic and international conditions led to the update. Key positive factors include faster inflation decline and increased real wage rates, especially in rural regions, alongside GST rationalization.

Looking forward, Ind-Ra notes that a swift Indo-US trade agreement and favorable winter weather could boost growth beyond the projected 7%. However, weaker-than-expected demand might counteract these benefits. Export challenges are noted, with Indian exports to the US declining significantly, though a trade deal could improve the situation.

(With inputs from agencies.)