New Delhi, May 29 Crisil on Thursday forecast India’s gross domestic product (GDP) growth at 6.5 per cent in fiscal 2026, adding that improving domestic consumption is likely to support industrial activity.
“We expect domestic consumption demand to improve driven by healthy agricultural growth, easing inflation supporting discretionary spend, rate cuts by the Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) and income tax relief this fiscal,” the global ratings agency said in a note.
The India Meteorological Department expects an above-normal monsoon this fiscal (106 per cent of long-period average), which bodes well for agricultural production and inflation.
Furthermore, according to Crisil Intelligence, crude oil prices are expected to remain subdued this fiscal, averaging $65-$70 per barrel compared with an average of $78.8 per barrel in the prevoius fiscal.
“We expect the MPC to cut the repo rate by another 50 basis points (bps) this fiscal, after 50 bps cuts until April. Bank lending rates have begun easing, which should support domestic demand,” according to the note.
Overall, Crisil forecasts gross domestic product (GDP) growth at 6.5 per cent in fiscal 2026, with external headwinds posing downside risks.
In the month of significant tariff announcements by the United States (US), IIP growth slowed in April. Production slowed in certain export-oriented sectors (including pharmaceuticals and chemicals), while front-loading exports benefitted others (machinery and readymade garments). Among consumer goods, durables performed better than non-durables.
Industrial goods recorded a mixed performance, with output growth in capital goods picked up sharply along with a mild acceleration in intermediate goods.
Performance of export-oriented sectors was mixed in April, despite the sharp improvement in merchandise exports (9.0 per cent in April in nominal terms vs 0.7 per cent in the previous month).
There was also a 6.4 per cent increase in the production of consumer durables such as electronic goods, refrigerators, and TVs during November, reflecting the higher consumer demand for these items amid rising incomes, according to data released by the Ministry of Statistics.
The infrastructure sector clocked a growth of 4 per cent on the back of big-ticket government projects being implemented in the highways, railways and ports sectors.
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