India's economy is projected to grow by 6.2% in FY26, according to the latest Monthly Economic Review by the Finance Ministry. While this marks a modest 30 basis point cut from the January 2025 forecast, India continues to retain its position as the fastest-growing major economy globally.
April Shows of Growth Amid Global Uncertainty
Despite a challenging global backdrop, India demonstrated remarkable economic resilience in April 2025. Key indicators such as GST collections, e-way bill generation, and the manufacturing and services PMI all reached record or near-record levels. This reflects sustained industrial and commercial activity across the country.
Inflation Hits Multi-Year Low
Retail inflation fell sharply to 3.16%, the lowest since July 2019. Food inflation also eased to 1.8%, driven by a strong rabi harvest, increased summer crop sowing, and adequate buffer stocks. With the Indian Meteorological Department forecasting an above-normal monsoon, the outlook for price stability remains strong.
Exports Surge and Rupee Holds Ground
India’s exports defied global slowdown fears, rising by 12.7% year-on-year. The rupee emerged as one of the top-performing major currencies. These trends contributed to Morningstar DBRS upgrading India’s sovereign rating to BBB (Stable), citing macroeconomic stability and infrastructure investment.
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Investments and Employment Indicators Turn Positive
Private investments rebounded strongly, with new announcements touching ₹14.4 lakh crore in Q4 FY25. On the employment front, EPFO data revealed 14.6 lakh net payroll additions in March, predominantly from young jobseekers.
Risks Remain, But Fundamentals Are Strong
While global trade tensions, particularly with the US, pose risks, India’s strong domestic demand, policy consistency, and a stable macroeconomic environment ensure it remains a standout among global peers.
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