Fitch Revises India FY26 GDP Growth to 6.9% on Robust Domestic Demand

India’s GDP growth projection for FY26 has been revised upward to 6.9% from 6.5% by Fitch Ratings, driven by robust domestic demand and supportive financial conditions. According to a Moneycontrol report, the upgrade follows India’s unexpectedly strong 7.8% GDPgrowth in Q1 of FY2025-26, surpassing the previous quarter’s 7.4% expansion.

Fitch flagged potential risks to India’s projected growth, including rising tensions with the US, which could affect investor sentiment despite ongoing customs duty negotiations. 

The agency projects GDP growth to moderate to 6.3% in FY27 and 6.2% in FY28. While domestic demand will remain the primary driver, the strong momentum seen in early FY26 is unlikely to sustain through the second half of the year.

The Indian economy expanded by 6.5% in the same quarter last year and recorded 7.4% growth in the preceding quarter (Q1 FY26).

“Real GDP is estimated to have grown by 7.8% in Q1 of FY2025-26, up from 6.5% in Q1 of FY2024-25,” the Ministry of Statistics & Programme Implementation (MoSPI) stated.

At constant prices, real GDP in Q1 FY2025-26 is estimated at Rs 47.89 lakh crore, compared with Rs 44.42 lakh crore in the same quarter last year. Nominal GDP, which accounts for inflation, recorded an 8.8% growth rate during the quarter.

The agriculture and allied sector saw a real GVA growth of 3.7%, up from 1.5% in Q1 FY2024-25. Secondary sectors, notably manufacturing (7.7%) and construction (7.6%), posted growth above 7.5% at constant prices. However, mining and quarrying (-3.1%) and electricity, gas, water supply, and other utility services (0.5%) experienced moderated real growth in Q1 FY2025-26, the ministry added.

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