S&P Ups India’s FY26 growth forecast

New Delhi

S&P Global Ratings has revised India’s GDP growth forecast for the fiscal year 2025–26 to 6.5%, citing expectations of a normal monsoon, lower crude oil prices, income tax concessions, and monetary easing. The rating agency had earlier projected 6.3% growth, but upgraded its estimate in its latest Asia Pacific Economic Outlook report released on Tuesday.

The report highlighted that India’s economic resilience, particularly in domestic demand, is playing a key role in mitigating the impact of global headwinds. S&P noted that India’s limited reliance on goods exports provides a buffer amid global trade disruptions.

However, S&P also flagged concerns over the ongoing conflict in the Middle East, especially the potential long-term impact of rising crude oil prices. The agency warned that any sustained spike in oil prices could adversely affect Asia-Pacific economies, particularly net energy importers like India, by straining their current accounts and slowing growth. India currently imports 90% of its crude oil and nearly 50% of its natural gas requirements.

Despite geopolitical uncertainties—including recent US strikes on Iranian nuclear facilities—S&P believes that global oil markets remain well-supplied, reducing the chances of a prolonged surge in energy prices.

S&P’s revised forecast aligns with the Reserve Bank of India’s earlier projection of 6.5% GDP growth for FY26. The agency also cautioned that rising US import tariffs and global trade uncertainties could weigh on future investment and economic momentum. Overall, S&P sees India’s domestic strength as a key pillar supporting its growth outlook amid turbulent global conditions.