Fitch Ratings raises India FY26 GDP growth forecast to 7.4% from 6.9%.

Key facts

• Fitch Ratings raised India’s FY26 GDP growth forecast to 7.4% from 6.9%.
• GDP growth is expected to slow to 6.4% in FY27.
• India’s GDP growth hit a six-quarter high of 8.2% in Q2FY26.
• Fitch projects the Indian rupee to strengthen to 87 per dollar by end-2026 from 88.5 projected for end-2025.
• Retail inflation fell to a record low of 0.25% in October.
• Fitch expects the Reserve Bank of India (RBI) to cut the policy rate by 25 basis points to 5.25% in December.
• The RBI has already cut rates by 100 basis points in 2025 so far.
• Fitch sees the RBI holding the policy rate at 5.25% over the next two years.
• India faces an effective tariff rate of around 35% on exports to the US.
• GST reforms effective September 22 shifted to a two-rate structure of 5% and 18%, lowering tax rates on about 375 items.
• Private investment is projected to pick up in the second half of 2026-27 as financial conditions loosen.