Deloitte India has projected that the country’s economy will grow between 6.4% and 6.7% in FY26, supported by resilient domestic demand, easing inflation, and a strategic push in global trade diplomacy.
However, it has also cautioned that geopolitical uncertainties and trade risks could influence the economic outlook, making it essential for India to closely monitor its trade exposure.
Growth Drivers for FY26
India’s GDP growth is expected to remain robust due to what Deloitte calls a “virtuous trifecta”:
- Resilient capital markets
- A dynamic consumer base
- A globally competitive workforce
These factors, combined with strategic trade negotiations, are expected to boost income, jobs, market access, and domestic demand.
In FY25, India registered a 6.5% growth rate, and the forecast for FY26 is only slightly lower, indicating continued economic stability despite global headwinds.
Role of Trade Diplomacy in Growth
Deloitte emphasises that international trade deals will play a crucial role in sustaining and enhancing growth momentum. Key developments include:
- India–UK trade negotiations (May 2025)
- Ongoing talks with the US
- Expected trade agreement with the European Union by end-2025
These agreements could significantly improve bilateral cooperation in sectors like artificial intelligence (AI), digital transformation, and innovation-led startups.
Expanding Global Opportunities
According to Deloitte, these trade partnerships are not just about tariff reductions but will also create:
- New job opportunities
- Higher market access for Indian companies
- Boosts to domestic demand
- Stronger integration into global value chains
Risks and Challenges
Despite the strong outlook, Deloitte has flagged several risks:
- Geopolitical uncertainties that could disrupt trade flows
- Regional conflicts affecting supply chains
- Restrictions on critical minerals and specialised fertilisers impacting industries like agriculture and manufacturing
These challenges mean India must remain agile in policy-making and trade strategy.
The Broader Economic Context
Globally, growth remains uneven and uncertain. While advanced economies face slower growth, India’s growth trajectory stands out due to its domestic market resilience and ability to adapt to global shifts.
Rumki Majumdar, Economist at Deloitte India, highlighted that India’s economic momentum is built on strong market fundamentals and a globally competitive workforce, giving it a unique advantage in the current economic climate.