New Delhi: The Indian economy is projected to grow at 6.5 percent in the current financial year (2025–26), buoyed by strong domestic fundamentals despite mounting global uncertainties, according to S. Mahendra Dev, Chairman, Economic Advisory Council to the Prime Minister (EAC-PM).
Speaking on Tuesday, Dev noted that the country’s economic resilience stems from a favourable policy environment, declining inflation, and robust domestic demand.
“There are significant global headwinds, including geopolitical tensions and trade policy uncertainties. However, the Indian economy remains resilient and continues to be the fastest-growing among large economies,” he said.
Dev attributed the expected growth to a combination of low inflation—supported by a favourable monsoon—and a benign interest rate environment, driven by three consecutive rate cuts by the Reserve Bank of India (RBI).
He added that high-frequency indicators for the first two months of FY26 reflect continued strength in domestic economic activity.
“A 6.5 percent GDP growth for FY26 is feasible despite global uncertainties. India’s medium-term growth outlook remains strong, underpinned by sound fiscal management,” he stated.
According to Dev, rising public capital expenditure is expected to further stimulate economic activity, complemented by healthy expansion in private consumption.
These factors, he said, will play a crucial role in sustaining momentum through the year.
However, global financial institutions have taken a more cautious view. Both the International Monetary Fund (IMF) and the World Bank recently revised India’s growth projections downward to 6.2 percent and 6.3 percent, respectively, citing increased global risks and trade-related disruptions.
The Indian economy is estimated to have grown at 6.5 percent in FY2024–25, maintaining its position as one of the world’s fastest-growing major economies.
