India's real GDP growth projected at 6.5 pc in FY 2025-26: RBI

New Delhi, May 29 The real GDP growth for India in FY 2025-26 is projected at 6.5 per cent, with risks evenly balanced, the Reserve Bank of India (RBI) said on Thursday.

The Indian economy is poised to remain the fastest-growing major economy this fiscal (FY26) by leveraging its sound macroeconomic fundamentals, robust financial sector and commitment towards sustainable growth, said the RBI in its ‘2024-2025 annual report’.

This growth will come despite global financial market volatility, geopolitical tensions, trade fragmentation, supply chain disruptions and climate-induced uncertainties which pose downside risks to the growth outlook and upside risks to the inflation outlook.

The outlook for the Indian economy remains promising in 2025-26, supported by revival in consumption demand, the government’s continued thrust on capex while adhering to the path of fiscal consolidation, healthy balance sheets of banks and corporates, easing financial conditions, continuing resilience of the services sector and strengthening of consumer and business optimism, besides sound macroeconomic fundamentals.

“The prospects for agriculture sector appear favourable in 2025-26 on the back of expected above normal south-west monsoon and several productivity-enhancing government policies. In the Union Budget 2025-26, various new initiatives have been announced for boosting agriculture sector,” said the RBI report.

Manufacturing sector is expected to gain further traction in 2025-26 supported by improvement in domestic demand, higher capacity utilisation, healthy balance sheets of corporates and banks, and consumer and business optimism.

The government’s focus on widening the manufacturing base and the policy support through the ongoing PLI scheme and National Manufacturing Mission announced in the Union Budget 2025-26 is expected to further strengthen ‘Make in India’ initiative, according to the RBI annual report.

The optimism about manufacturing and services sectors is also reflected in the forward-looking surveys conducted by the Reserve Bank.

In FY 2024-2025, the Indian economy exhibited resilience, supported by strong macroeconomic fundamentals and proactive policy measures, amidst protracted geopolitical tensions and geoeconomic fragmentation.

“Amid multiple global headwinds, the Indian financial markets demonstrated resilience and orderly movements. The central government sustained its fiscal consolidation efforts, supported by buoyant tax revenues and prudent expenditure management. On the external front, merchandise trade deficit was offset by robust services exports and steady remittance inflows, keeping the CAD at a sustainable level,” said the RBI report.

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