Deloitte Sees Strong Economic Growth Ahead
Deloitte India has projected India’s economy to grow at 6.5-6.8 per cent in the current fiscal, with growth expected to strengthen in the second half of the year. Growth is supported by festive demand, monetary easing, and a gradual stabilisation in global conditions, according to the company’s latest Economic Outlook report.
India entered 2026 in a phase with macroeconomic fundamentals appearing unusually well balanced. Geopolitical developments triggered volatility in commodity prices and weakened investor sentiment, affecting the global economy.
This resulted in a wider trade deficit, sustained capital outflows, and a sharp depreciation of the rupee against the US dollar within a matter of weeks. The RBI had last month lowered India’s GDP growth estimates for the current fiscal to 6.6 per cent, from 6.9 per cent estimated earlier.
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GDP grew 7.7 per cent in the previous fiscal. Deloitte India Economist, Rumki Majumdar, said the global environment has become considerably more uncertain, with weather-related uncertainties remaining an important downside risk.
Despite near-term headwinds, Deloitte remains optimistic about India’s medium-term growth prospects, citing the country’s accelerated pursuit of Free Trade Agreements with large and strategically important markets. Majumdar notes that India’s priority must be to convert market access into lasting competitiveness.
They must complement trade policy with industrial policy, world-class infrastructure, stronger domestic supplier ecosystems, easier compliance, and continued investment in innovation and skills to raise domestic value addition over time.
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Inflation remains one of the key risks to the growth outlook, with higher prices of crude oil, fertilisers, essential minerals, and edible oils feeding into domestic prices. India’s retail inflation surged to an 18-month high of 4.38 per cent in June on higher food and fuel prices.
A weak monsoon could further raise inflationary pressure in the coming months as food prices respond first. Since food accounts for nearly 46 per cent of India’s CPI basket, sustained food inflation can quickly become broad-based by influencing household inflation expectations and wage demands.
Policymakers face a delicate balancing act, as they must contain inflation without relying excessively on subsidies, which would create difficult trade-offs between macroeconomic stability and fiscal discipline, Majumdar said.
