Fitch raises India's FY26 growth forecast to 6.9%
Fitch Ratings just raised its outlook for India's GDP growth in the year ending March 2026 to 6.9% (up from 6.5%).
This comes after a strong start to the year, with Q1 growth hitting 7.8%—thanks mostly to booming services and steady consumer spending.
Services booming, manufacturing also doing well
India's services sector is thriving, with the August 2025 PMI shooting up to its highest since 2010 at 62.9.
Manufacturing isn't far behind—its PMI reached a 17-year high of 59.3.
Both numbers show that domestic demand is really driving things forward.
Inflation to remain low; US tariffs, Russian oil penalties risks
Fitch did flag some risks, especially from rising US tariffs on Indian goods and penalties tied to Russian oil imports—stuff that could slow down investment or shake confidence.
On the bright side, inflation is expected to stay low at around 3.2% in 2025, helped by good monsoons and solid food stocks.
The RBI might cut rates slightly later this year but will likely hold steady through next year before nudging them up again in FY27 as growth cools off a bit (to around 6.3% in FY27 and 6.2% in FY28).