Goldman Sachs raises India's GDP growth forecast to 6.9%
What's the story
Global investment bank Goldman Sachs has revised its growth forecast for India, raising the country's real GDP growth in calendar year 2026 (CY26) by 20 basis points to 6.9%. The revision comes after the India-US trade deal was announced, which is expected to have a positive impact on Indian exports due to lower US tariffs, specifically reducing from 50% to 18%.
Economic forecast
Current account deficit estimate lowered
In its assessment, Goldman Sachs said, "We upgraded our forecast for India's real GDP growth in CY26 by 20bp to 6.9% yoy reflecting the lower US tariffs." The firm also lowered its estimate of India's current account deficit (CAD) by around 0.25% of GDP to 0.8% in CY26. This revision comes after US President Donald Trump's announcement of tariff reductions on Indian exports.
Currency impact
Indian rupee's pressure eased
Goldman Sachs also noted that the trade deal has eased pressure on the Indian rupee (INR), which was the best-performing emerging market currency over the past week. However, it expects limited further appreciation from current levels due to a possible gradual unwind of short forward book and further accumulation of foreign exchange reserves by Reserve Bank of India following the announcement of the India-US trade deal framework.