India’s economy is expected to grow 6.5% in FY26, driven by strong domestic demand, GST rate cuts, and income tax reforms. Government spending and investment are also supporting growth.
S&P Global reported that India’s GDP rose 7.8% in the June quarter, higher than expected. Inflation is now forecast at 3.2% this fiscal year after food prices dropped. The Reserve Bank of India may cut interest rates by 25 basis points.
Domestic demand remains strong as consumer spending and government investment continue to rise. India stands out in Asia-Pacific for resilient growth despite global challenges. Higher U.S. tariffs and slower global trade have slowed other regional economies.
China, by contrast, faces weaker exports and slowing domestic consumption. S&P expects China’s GDP to grow 4% in the second half of 2025 and 2026. Falling housing sales and low consumer confidence are adding pressure.
