India's Upward Growth Trajectory: ADB Forecasts Robust FY26 Expansion

The Asian Development Bank (ADB) has increased India's growth forecast for FY26 to 7.2%, driven by strong domestic consumption and tax cuts. This upgrade will aid Asia's growth to 5.1% for 2025. Despite moderation in H2, ongoing demand and supportive policies are expected to sustain economic momentum.

The Asian Development Bank (ADB) has revised India's economic growth forecast for Fiscal Year 2026 to 7.2%, up from 6.5%, stimulated by vigorous domestic consumption and recent tax reductions.

This significant upgrade is expected to contribute to Asia's projected growth rate of 5.1% in 2025, according to ADB's Asian Development Outlook, December 2025. The report highlights a six-quarter high GDP growth of 8.2% for India in the second quarter, attributed to robust manufacturing, services sectors expansion, and increasing investment.

However, ADB retains a moderate growth outlook of 6.5% for FY27, citing potential challenges such as fiscal policy adjustments and US tariff impacts. Nonetheless, the forecast remains optimistic with expected steady consumption, labor law reforms, and resilient credit growth keeping momentum strong.

(With inputs from agencies.)