India’s real GDP growth for FY26 is expected to surpass 6.5%, as per ICRA’s latest economic outlook released on June 18, 2025. The agency also anticipates a GVA growth of over 6.3%, CPI inflation above 4.2%, and a fiscal deficit at 4.4% of GDP. Rural demand and services exports are projected to remain strong, while merchandise exports may remain subdued.
Leading credit rating agency ICRA Ltd, headquartered in Gurugram, Haryana, has projected that India’s real GDP growth for the financial year 2025–26 (FY26) could exceed 6.5%, while Gross Value Added (GVA) growth is expected to be above 6.3%.
In its latest economic outlook released on June 18, 2025, ICRA highlighted that despite global uncertainties, India’s economy is set to maintain steady momentum. Rural demand, supported by strong Rabi crop cash flows and above-normal reservoir levels, is likely to remain upbeat through the fiscal year.
The report added that Consumer Price Index (CPI) inflation is expected to be above 4.2%, while the Wholesale Price Index (WPI) may exceed 2.7%. The agency has projected the fiscal deficit at 4.4% of GDP and the current account deficit at -1% of GDP.
ICRA anticipates that services exports will continue to perform well, even as merchandise exports face pressure in the short term. The report also noted that income tax relief measures outlined in the Union Budget 2025-26, combined with potential rate cuts and a cooling of food inflation, could boost household disposable incomes.
Founded in 1991, ICRA is a leading Indian credit rating agency that offers ratings, research, and risk analysis services. It is majority-owned by Moody’s Corporation and plays a crucial role in assessing India’s economic outlook and business environment.
