Deloitte Predicts Strong India Growth in FY26, Moderation in FY27

shubham kumar

14 Jan 2026

2 Min

Deloitte Predicts Strong India Growth in FY26, Moderation in FY27

Why in News?

Deloitte India released its latest "India Economic Outlook," projecting that India's economy will remain the fastest-growing major economy. The report credits the sustained momentum to pro-growth policies, strong services sector performance, and resilient domestic demand, despite high global trade tariffs and volatile capital flows.

Key Points

FY26 Growth Forecast: Real GDP is projected to expand by 7.5%–7.8% in the current fiscal year (FY2025–26).
H1 FY26 Performance: The economy grew by 8% in the first half (April–September 2025), acting as a "shock absorber" against global headwinds.
FY27 Moderation: Growth is expected to ease to 6.6%–6.9% in FY2026–27 due to a high base effect and persistent global uncertainties.
Policy Drivers: Key growth catalysts include GST rationalization, tax exemptions for middle-income segments, and RBI policy rate cuts that improved liquidity.
Capex Surge: Public investment remained high, with capital expenditure utilization reaching 58.4% by November 2025.
Future Pivot: In 2026, policy focus is expected to shift from demand-side measures to supply-side reforms, targeting MSMEs and Tier-2/Tier-3 cities.

Important Terms

Base Effect: The impact that the choice of a basis of comparison (last year's data) has on the calculation of current period growth.
GFCF (Gross Fixed Capital Formation): A statistical measure of the value of acquisitions of new or existing fixed assets, representing total investment in the economy.
Supply-side Reforms: Policies aimed at increasing the economy's productive capacity, such as improving labor productivity or infrastructure.
Recalibration of Trade: India's strategic shift to diversify exports through new Free Trade Agreements (FTAs) with the UK, Oman, and the EFTA.

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