New Delhi/Mumbai [India], December 2 : The Indian economy is expected to grow at 7 per cent in the current fiscal 2025-26, and subsequently moderate to 6.7 per cent in the next, Dharmakirti Joshi, Chief Economist, CRISIL Limited, toldin an exclusive interview.
"For the next year, we expect the momentum to continue, but at a slightly slower pace," Joshi said, forecasting 6.7 per cent for the 2026-27 fiscal.
For the current fiscal year, the economist noted that India will grow at 7 per cent but with "a slight moderation in growth in the second half."
At the same time, he noted that the economy will get a jab on the arm once the first tranche of the ambitious India-US Bilateral Trade Agreement gets finalised.
"When we sign the treaty (with the US), I think there will be more confidence, you will get more capital inflows into the system, and I think it will also reduce stress on sectors like gems and jewellery, textiles, etc," Joshi said in the interview.
"I think the GDP growth story is largely India driven. I think we also gave stimulus in terms of GST rate cuts. Before that, I think the income tax rates had been brought down. And together with that, I think we have support for the rural economy, and monsoons have been reasonably good. So all these factors did support India's growth. India is largely a domestically driven economy. So if the domestic economy does well, we generally do well. And if we get a trade deal, think that will support growth even more," he supplemented.
Asked to react to the rupee's consistent depreciation and what the future holds for the Indian currency, the economist said he sees the appreciation around the corner.
"My belief is that if you get a trade deal (with the US), I think the depreciated rupee will again start appreciating, and I think it also depends quite a lot on what the global financial conditions are and our expectation is that rupee will strengthen from these levels in the months ahead," Joshi said.
So far, the rupee has depreciated by 5 per cent this year, and at the time of filing this report, the rupee was trading at a fresh low of 89.94 against the USD.
"If you see the history of the Rupee since 2013-14, the taper tantrum period, I think we have seen periods when the Rupee weakens much faster. And there are periods when it strengthens also," he said, in a way affirming that weakening and strengthening are part of the market conditions.
Asked on his expectations on RBI's policy decision, Joshi said the central bank could go for a rate cut, given global growth is a concern, even asthe Indian economy grows robustly.
"We expect a rate cut, but fingers crossed on what the RBI will do. We'll have to wait till December 5th," Joshi added. "I would believe that given the volatile and uncertain global environment, a rate cut could be something like an insurance rate cut."
The next Monetary Policy Committee (MPC) meeting is scheduled for December 3-5, 2025
At the last policy meet in October, the Monetary Policy Committee (MPC) of the RBI, in a unanimous decision, kept the policy repo rate unchanged at 5.5 per cent. The RBI governor had noted that headline inflation had moderated considerably, providing the MPC with confidence to maintain the rate stance.
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