New Delhi [India], September 1 : Crisil has maintained India's GDP growth forecast for the current fiscal year 2025-26 at 6.5 per cent even as it sees downside risks emanating from the US tariffs.
In 2024-25, the Indian economy grew by 6.5 per cent in real terms.
In its latest macroeconomics report, the global analytics company noted that India's export growth is expected to be a drag on GDP growth in the coming quarters, following the imposition of 50 per cent tariffs on India by the US, which took effect on August 27.
"Slowing global growth may put further pressure on export growth," it said.
Further explaining the downside risks, it asserted that certain labour-intensive sectors are particularly vulnerable.
Global growth is expected to slow down to 2.9 per cent in 2025 from 3.3 per cent in 2024 according to S&P Global. Additionally, the heightened uncertainty could hinder private investments, as business decisions may be delayed.
India's real GDP is estimated to have grown by 7.8 per cent in the April-June quarter of the financial year 2025-26, surpassing the 6.5 per cent growth rate in the same quarter of the previous fiscal, according to official data released on Friday. India's nominal GDP grew at an annual rate of 8.8% during the April-June quarter.
The government has maintained the GDP forecast at 6.3-6.8 per cent for 2025-26, even as US tariff uncertainty looms, affirming confidence in the country's robust domestic consumption.
In Crisil's view, private consumption is poised to be the primary driver of India's GDP growth in 2025-26.
A healthy monsoon, a robust agricultural production outlook, the RBI's 100-bps cut in the repo rate so far in 2025 and a cut in the cash reserve ratio (CRR, to be carried out in four traches between September and December), and fiscal policy support in the form of income tax relief and expected increased spending on key rural schemes would also encourage private consumption, Crisil backed its argument.
"The proposed change in the Goods and Services Tax structure, which may reduce the tax in some consumer segments, could also support growth this fiscal, depending on when the proposed changes come into effect. However, it is too early to assess the impact as this as the changes are yet to be finalised," the Crisil report noted.
Prime Minister Narendra Modi, from the ramparts of the Red Fort on August 15, announced that a next-gen GST reform is on the horizon by Diwali.
The next GST Council meeting is scheduled for September 3-4 in Delhi, and the reform agenda is expected to be discussed.
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