India’s GDP Growth To Slow Down To 6.5% Amid Global Uncertainties: RBI

India’s GDP growth projection for the financial year 2025-26 has been trimmed to 6.5% from the earlier estimate of 6.7%, Reserve Bank of India (RBI) Governor Sanjay Malhotra announced during the policy update on Wednesday. The revision follows a strong 9.2% growth recorded in FY 2024-25, as reported by the Ministry of Statistics and Programme Implementation (MOSPI).

Despite the downward revision, Malhotra remained optimistic about the economy’s trajectory. He pointed out that the agriculture sector is set to perform well, backed by strong reservoir levels and healthy crop yields.

Manufacturing activity is also showing positive signs, with business expectations on the rise, while the services sector continues to maintain its resilience.

Although the economy is recovering after a weak first half in the previous fiscal year, Malhotra acknowledged that growth is still below desired levels.

On the demand front, rural consumption is expected to stay strong, supported by favorable agricultural conditions. Urban spending is also picking up, driven by rising discretionary expenditures.

Investment activity has gained momentum, fueled by increased capacity utilization, strong corporate and banking sector balance sheets, and continued government investment in infrastructure. "With easing financial conditions and government focus on infrastructure, investment activity is expected to remain strong," Malhotra noted.

While domestic factors remain supportive, Malhotra cautioned that merchandise exports could face pressure due to global economic uncertainties. However, he expects services exports to remain stable, providing a cushion for overall economic growth.

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