Indian Economy to Grow at 6.5% in FY26: EAC-PM Chairman Mahendra Dev

India’s economy is expected to grow at 6.5% in the current financial year (2025–26), driven by strong domestic fundamentals despite mounting global uncertainties, according to S. Mahendra Dev, Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM).

Dev highlighted the country’s economic resilience, attributing it to a supportive policy landscape, easing inflation, and sustained domestic demand.

“There are significant global headwinds, including geopolitical tensions and trade policy uncertainties. However, the Indian economy remains resilient and continues to be the fastest-growing among large economies,” he said.

Dev cited several factors behind the optimistic growth outlook, including a favourable monsoon that is expected to keep inflation low, and a supportive interest rate environment shaped by three consecutive rate cuts by the Reserve Bank of India (RBI).

“A 6.5 percent GDP growth for FY26 is feasible despite global uncertainties. India’s medium-term growth outlook remains strong, underpinned by sound fiscal management,” he stated.

He noted that high-frequency economic indicators for the first two months of FY26 have shown continued strength in domestic activity, further reinforcing the growth momentum.

According to Dev, rising public capital expenditure and healthy private consumption are likely to be key drivers of economic expansion this year. “These factors will play a crucial role in sustaining momentum through the year,” he added.

However, global financial institutions remain cautious. Both the International Monetary Fund (IMF) and the World Bank recently revised their growth projections for India downward—to 6.2% and 6.3% respectively—citing increased global risks and trade-related disruptions.

ALSO READ: India’s GDP to Surpass Germany, Japan by 2027: NITI Aayog CEO