New Delhi, September 11, 2025 – Global rating agency Fitch Ratings has revised India’s growth outlook upward, projecting the economy to expand by 6.9% in FY26, compared with its earlier estimate of 6.5%. The move comes after India reported a stronger-than-expected 7.8% GDP growth in Q2, showcasing the resilience of domestic demand despite global headwinds.
While Fitch also raised its global growth forecast for 2025 to 2.4% (from 2.2%), it warned of looming risks tied to a potential slowdown in the United States. The agency noted that while China and the eurozone are showing encouraging signs, the global economy still faces inflationary pressures and trade uncertainties.
India’s Growth Drivers
According to Fitch, India’s momentum is being fueled by:
- Robust domestic consumption across urban and rural markets.
- Government-led infrastructure spending, which continues to generate demand in core sectors.
- Improving export performance, particularly in services like IT and pharmaceuticals.
Additionally, strong capital inflows and structural reforms are supporting long-term growth prospects. Fitch expects India to maintain growth above 6% through FY28, making it one of the fastest-growing major economies.
Policy Outlook
The report suggests that the Reserve Bank of India (RBI) may introduce another rate cut later this year to sustain momentum, given easing inflation. This could provide additional relief for businesses and consumers, particularly in credit-sensitive sectors like housing and automobiles.
Global Context
Even as India stands out, Fitch highlighted challenges globally:
- The S. economy shows signs of cooling, raising questions about global demand.
- Geopolitical tensions and trade barriers continue to weigh on international supply chains.
- AI-driven growth in Asia is emerging as a balancing factor, with technology markets witnessing renewed investor optimism.
Conclusion
India’s economic story remains a bright spot in an otherwise uncertain global landscape. With Fitch upgrading growth projections and signaling policy support from the RBI, the country is well-positioned to sustain momentum. However, global volatility, particularly in the U.S., means that policymakers and investors alike must tread with caution.
