India's Economic Growth Set to Exceed Expectations
India's chief economic advisor V Anantha Nageswaran has expressed strong confidence that the country's economic growth for fiscal year 2026 will surpass 6.8%, marking a significant upward revision from earlier projections. The optimistic forecast comes amid strengthening consumption patterns supported by recent policy measures.
Revised Projections and Economic Momentum
Speaking at CNBC-TV18's Global Leadership Summit 2025 on Friday, Nageswaran revealed his increased confidence in India's growth trajectory. "I am comfortable looking at a number north of 6.8 per cent now," he stated, noting that his original range was between 6.3 to 6.8 percent as projected in the Economic Survey.
The economic advisor highlighted the remarkable turnaround in sentiment since August, when concerns persisted about whether growth would even reach the lower end of the 6-7 percent range. "Now I think there is a lot of comfort in saying that it would be definitely north of 6.5 and I am more comfortable saying even north of 6.8," Nageswaran emphasized.
However, he maintained caution about projecting growth above 7 percent, indicating he would await second quarter numbers before making that call. "Whether I will put a 7 handle in front of it, I will wait for the second quarter numbers to come out before I move even a notch higher," he added.
Strong Q1 Performance and Sectoral Drivers
The revised optimism builds on India's impressive 7.8% GDP growth recorded in the first quarter of FY26. This robust performance was primarily driven by a strong agricultural sector and exceptional showings in key services segments including trade, hospitality, finance, and real estate.
India's current growth momentum represents a continuation of the strong economic performance seen in the previous fiscal year, when the country achieved an 8.4% growth rate during January-March 2024 - the previous high watermark for economic expansion.
Despite facing global economic headwinds, India continues to maintain its position as the world's fastest-growing major economy. This distinction becomes particularly notable when compared with China's 5.2% GDP growth during the April-June quarter, underscoring India's relative economic resilience.
Consumption Boost and Trade Prospects
The anticipated growth acceleration is expected to be fueled by stronger consumption patterns, supported by recent policy interventions. GST rate reductions and income tax relief measures are identified as key drivers that will likely boost consumer spending and overall economic activity.
Nageswaran also pointed to potential additional growth catalysts, particularly a potential breakthrough in the India-US Bilateral Trade Agreement (BTA). "If by some chance, as we are still hoping, there is a resolution on the trade front, then the upward bias will become a mainstream forecast," he remarked.
While expressing hope that the trade deal could be concluded soon, the chief economic advisor refrained from providing a specific timeframe for resolution. The trade tensions emerged after the US imposed steep tariffs on Indian goods starting August 27, including a 25% penalty on oil imports from Russia, with some tariffs reaching as high as 50%.
The Trump administration had justified these measures by citing India's continued crude purchases from Russia and existing trade barriers. A resolution to these trade disputes could provide significant additional momentum to India's growth story, potentially pushing economic expansion even beyond current optimistic projections.
