New Delhi, 30 December. India’s economic growth is expected to accelerate in the current financial year 2025-26, with the country’s GDP growth projected at 7.4 percent. This is higher than the estimated 6.5 percent growth in the previous financial year 2024-25, according to a report by ICRA Limited released on Tuesday.
The report states that economic growth is likely to remain strong in the first six months of the current financial year, with GDP growth potentially reaching around 8 percent during this period.
However, in the latter half of the year, the growth rate may slow down and could fall below 7 percent.
The report highlights external challenges, particularly weak exports, which may impact the economy unless a trade agreement with the United States is reached.
According to ICRA, economic activity was robust in the third quarter of FY 2026. Increased demand during the festive season and reductions in GST rates have contributed to higher consumer spending.
The report further mentions that mining, construction, and electricity demand are expected to rise in the coming months. Earlier difficulties in these sectors caused by rainfall are likely to ease, improving conditions.
At the same time, the decline in exports could worsen in the second half of the year, putting pressure on economic growth.
ICRA’s Chief Economist Aditi Nair said the economic growth in 2025 was better than expected, supported by strong government policy measures.
She explained that income tax relief, changes in GST rates, a total cut of 1.25 percent (125 basis points) in the repo rate, and measures to increase market liquidity helped sustain demand.
She also noted that low inflation eased the burden on household spending and good monsoon rains benefited agriculture.
However, she cautioned that external concerns remain, and if a trade agreement with the US is not signed soon, it could affect growth in the future.
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My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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