India's Economic Resilience Shines Through Global Challenges

India's economy is projected to grow at a steady 6.6 per cent in the financial year 2025-26, as per Deloitte's latest forecast. This growth comes amid a complex backdrop of domestic stimulus measures and escalating global trade challenges.

Domestic Stimulus vs. Global Trade Tensions

The report highlights a resilient economy, despite a slowdown in the third quarter of FY2025, where growth eased to 6.1 per cent. Factors such as election-related uncertainty, erratic rainfall, and global trade turbulence were noted. However, revised figures reveal a robust 9.2 per cent expansion in FY2023-24, fueled by strong domestic demand.

Looking Ahead: FY26 Growth Drivers

Deloitte identifies key growth drivers for FY26, including income tax cuts from the Union Budget 2025, aimed at boosting consumer spending. Yet, global trade poses significant risks, with potential tariff increases threatening to elevate the total effective rate to 28.2 per cent by FY26's end.

Cautious Optimism Amid Uncertainty

Despite these challenges, Deloitte remains hopeful, suggesting that tax stimulus could mitigate some trade uncertainties. The World Bank also adjusted its GDP growth forecast for India to 6.3 per cent for FY2025-26, reflecting the delicate balance between domestic and global economic factors.