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ICRA Forecasts India's GDP Growth at 6.5% for FY26.

Economy Business | Dated: 10 Mar 2025

In March 2025, India's Credit Rating Agency, ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited), released its latest FY2026 GDP Outlook report. The report projects that India's Gross Domestic Product (GDP) will grow at 6.5% in Financial Year 2025-26 (FY26), compared to the 6.3% growth expected in FY25.

🎯 Key Highlights:

  • - This growth projection is driven by expectations of a pickup in both rural and urban demand, as well as increased investment activity.
  • - The rating agency also projects that the Gross Value Added (GVA) at basic price is expected to grow by 6.3% for FY26, supported by a recovery in consumption and investment activity.
  • - India's GDP and GVA growth increased to 6.2% each in Quarter (Q3: October-December) of FY25, compared to 5.6% and 5.8%, respectively, in Q2FY25.

💡 Other Important Facts:

  • (i) India's GDP is projected to grow at an average rate of 6.7% from 2025 to 2031, with manufacturing GVA expected to expand at 9%.
  • (ii) The overall agriculture GVA growth is expected to be 3.5%-4.0% in FY26, compared to an increase of 4.6% in FY25's Second Advance Estimate (SAE).
  • (iii) The growth in Capital Expenditure (capex) by the Government of India (GoI) and state governments will support GDP growth for FY26. However, external demand is expected to remain subdued in FY26 due to risks like trade wars, redirection of trade flows, and supply chain disruptions, likely affecting India's merchandise exports.

📚 Test Your Knowledge:

Recently, what GDP growth forecast did ICRA project for India in FY26?

Correct Answer: 6.5%

🚀 Quick Recap:

About ICRA Limited

  • MD & CEO : Ramnath Krishnan
  • Headquarters : Gurugram, Haryana