Fitch Ratings Cuts India’s GDP Growth Forecast for FY26 to 6.3% and Citing Export Weakness and Global Uncertainty.
Economy Business
In August 2025, Fitch Ratings Inc., a leading American credit rating agency, revised India’s GDP (Gross Domestic Product) growth forecast for FY26 to 6.3%, citing moderate export demand and limited impact of U.S. tariffs. This updated projection was detailed in Fitch’s latest report titled "India Corporates Credit Trends: July 2025".
- Fitch’s downward revision brings India’s projected GDP growth for FY2025–26 to 6.3%, a decrease from its earlier estimate of 6.4% released in its Global Economic Outlook (GEO) report in April 2025. The agency cited macroeconomic pressures and weaker global trade as primary reasons behind this moderation.
- According to the report, the recent 25% tariff imposed by the United States (USA) on Indian corporate exports has had limited direct impact, largely because of India's low export exposure to the U.S. market. Indian firms, particularly in manufacturing and core sectors, have been more reliant on domestic demand, which has cushioned them against external shocks.
Main Point :- (i) The report also highlighted a rise in domestic infrastructure spending, boosting demand across core sectors like steel, cement, and power. However, Fitch warned of a 3% decline in aggregate revenue for Indian corporates in FY26, citing weaker global consumption trends and rising interest costs.
(ii) In a related update, S&P Global Market Intelligence (MI) also projected India’s GDP at 6.2% for FY26, down from 6.5% in FY25, should the U.S. tariffs remain in place beyond September 2025.
(iii) S&P attributed this expected slowdown to persistent external headwinds and domestic cost pressures on Indian firms.
About Fitch Ratings
President : Ian Linnell
Headquarters : New York, the United States of America (USA)
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