India’s economy is set to grow faster than expected this fiscal year. This is due to strong early momentum and timely policy support. A Reuters poll now pegs GDP growth at 6.7% for FY26. This is slightly higher than last month’s estimate of 6.6%, as economists revise forecasts upward for the second consecutive month.

The upgrade follows a surprise 7.8% expansion in the April–June quarter. Additionally, recent cuts to the Goods and Services Tax (GST) aimed at boosting festive-season demand. Together, these have helped offset concerns around the US’s 50% tariff on Indian goods. Optimism is growing that the duties could soon be reduced.

Most economists in the 15th–24th October survey expect the Reserve Bank of India (RBI) to cut the repo rate by 25 basis points in December. This comes after signs that cooling inflation has given policymakers room to support growth. Inflation is projected to average 2.5% this fiscal year. It is expected to rise to 4.2% next year.

The poll also suggests the economy will maintain steady momentum. GDP is expected to grow 6.5% in both FY27 and FY28.

However, economists caution that private investment remains a weak spot. While GST cuts may lift consumption in the near term, lingering global uncertainty and shifting US trade policies continue to weigh on business confidence.

Experts believe that once policy clarity improves, a rebound in private investment could further strengthen India’s growth trajectory in the coming years.

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