New Delhi/Manila: The Asian Development Bank (ADB) has raised its growth projection for India from 6.5% to 7.2% for 2025-26, citing encouraging domestic demand and exports of technology goods as key drivers.
The Pre-Diwali GST 2.0 gift has also played a role here, even as the unreasonable US tariffs have affected certain sectors of the economy.
The September quarter has been particularly encouraging, with India’s GDP growth rising to 8.2%, a 6-month high. In fact, India witnessed its first deflation in a decade, encouraging the RBI to cut the repo rate to 5.25% earlier this month. The Central Bank also expects GDP to grow to 7.3% this year, encouraged by the robust Q2 performance.
A stronger harvest this year has also put food inflation in check, boosting aspirational demand for housing and consumer electronics, backed by steady credit growth. The service sector has also grown by 9.3% in the first half of FY26, driven by increasing demand despite the automation-driven layoffs in the IT sector.
Given the increasing availability of credit in the economy, the central government is expected to ease capital spending.
The Manila-based multilateral development bank, however, retained FY27 forecast at 6.5 per cent.
“Following stronger-than-anticipated growth in Q3, India’s 2025 growth projection is upgraded by 0.7 percentage points to 7.2 per cent, driven primarily by robust domestic consumption supported by recent tax cuts,” the bank said.
