A Deloitte report for India said that the country’s economy will grow at a rate of 6.5% to 6.8% in the current fiscal year, and the pace is expected to improve slightly in the FY2026 and touch 6.7%- 7.3%. India’s economy remains robust despite the slower than anticipated first half of FY2025 because of geo-political tensions, which exerted pressure on the economy, extra, heavy rainfall disrupting the agriculture and election year risk. Domestic demand force, good service delivery, manufacturing businesses that create more value, and a healthy export sector are the major components of the growth.
There have been some declines during the first half of the fiscal year, but India’s economy remains robust in several key areas, according to Deloitte India Economist Rumki Majumdar. ‘An analysis of India’s high-value manufacturing exports such as electronics, semiconductors, chemicals, consumption patterns, and a fast-growing services sector indicates a shift in India’s strength in GVC’, said Majumdar.
It is anticipated that the government’s emphasis on digital transformation, infrastructure development, and luring foreign direct investment (FDI) will improve economic efficiency and expand growth opportunities. India is anticipated to continue on a positive growth trajectory in spite of the obstacles, such as the Reserve Bank of India’s (RBI) recent reduction in its growth forecast from 7.2% to 6.6%.
Deloitte also noted that Indian capital markets remain unscathed because while the domestic as well as the retail investors have got more invested, the FIIs have withdrawn their funds in large numbers in the recent months. “To reiterate, the consumption spending in India will remain key drivers of the economic growth with focus arising from the rural sector and urban demand,” pointed Majumdar, who noted that government policies, social welfare measures and technology will continue to promote consumption expenditure.
Majumdar is cautiously optimistic about India’s future despite the fact that the country’s economy is likely to face a number of international obstacles, such as trade disputes, geopolitical tensions, and the ongoing effects of climate change. She underlined that India’s ability to leverage its advantages, like its growing middle class and demographic dividend, and decouple from global uncertainties will determine how much it can grow.
“India can take advantage of opportunities even in the face of global deglobalization trends by concentrating on workforce development, self-reliant manufacturing, and developing digital services,” Majumdar stated. With the increasing approach of the Union Budget for FY2025, the attention of the audience will shift to the government’s action plans with expectations for boosting the manufacturing domestic capacity, skill development and enhancing the position of India in the global supply chains.
