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India’s economy is expected to grow between 6.4 per cent and 6.7 per cent in the financial year 2025–26, according to Deloitte India’s latest outlook released on Tuesday. The firm attributed this upbeat forecast to resilient domestic demand, policy momentum, and India’s evolving position in global trade.

“India’s economic trajectory stands out in a turbulent global landscape. Our momentum is driven by a virtuous trifecta: resilient capital markets, a dynamic consumer base, and a globally competitive workforce,” said Rumki Majumdar, economist at Deloitte India.

In FY25, India’s GDP growth stood at 6.5 per cent, and Deloitte anticipates that momentum to continue as inflation eases and the government intensifies its focus on economic reforms and global engagement.

The firm noted that robust domestic fundamentals will remain a key pillar of India’s growth engine, with household consumption, infrastructure expansion, and private investment playing pivotal roles.

Strategic Trade Talks To Play A Key Role

Deloitte also highlighted India’s active involvement in strategic trade negotiations, particularly with the United Kingdom, United States, and the European Union. A potential agreement with the EU by year-end could significantly enhance India’s trade footprint, offering gains in income, employment, and market access.

Recent trade partnerships are seen as enablers of cooperation in emerging areas like artificial intelligence, digital technologies, and innovation-driven startups.

Caution Amid Geopolitical Headwinds

While optimistic on the macro outlook, Deloitte cautioned that India must closely monitor its trade exposure, especially in light of growing geopolitical uncertainties.

“As FY 2025–26 unfolds, India must monitor its trade exposure and be prepared for the outcomes of geopolitical uncertainties,” the report stated. It pointed out that ongoing regional conflicts and supply restrictions on critical minerals and fertilisers could pose downside risks.

Despite these headwinds, Deloitte maintained that India’s growth story remains robust, powered by a mix of domestic dynamism and global economic realignment.

“India’s growth story will be driven by a combination of robust domestic fundamentals and expanding global opportunities, amid uncertainties,” the report concluded.