India’s strong macroeconomic indicators have paved the way for robust growth outlooks for fiscal year 2026-27, but the delay in India-US trade deal may lead to revisions of some barometers.

According to global brokerage Goldman Sachs, India’s mass consumption trend, especially in the rural and lower income segments of urban spaces, is in a nascent recovery stage. In case of growth headwinds due to a further delay of the trade deal, the government needs to reserve policy ammunition to deal with the ongoing uncertainty.

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India’s mass consumption trend: Growth drivers, outlook

Goldman Sachs remains bullish on bottom-end mass consumption, citing multiple tailwinds driving growth in both rural and low-income urban segments. ”A good crop cycle led to transfer payments at the state level going towards women in lower income households, and the GST cuts were beneficial for the bottom segment,” said Sengupta.

The upper end of the consumer segment is divided into two parts — the middle and the top — which analysts call as affluent India. The affluent segment has grown at a rapid rapid pace post the COVID-19 pandemic and is now slowing down a bit, according to Sengupta. ”However, the middle segment is where there are some concerns due to job creation and the advent of AI.”

Central government fiscal consolidation moderated in FY26, shifting towards consumption support via income tax and consumption tax cuts. This resulted in strong 7.6% year-on-year real GDP growth in calendar year 2025, though nominal GDP growth was at a six-year low (excluding the pandemic) due to record-low inflation.

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Will India-US trade deal delay impact growth outlook?

The Goldman Sachs economist claimed that if the US trade deal is delayed beyond the first quarter of FY27, then there will be some downside risk to the growth estimates. ”We are looking at 6.7% growth for 2026 and 6.8% YoY growth for FY27. There will be some downside to the numbers as sectors like textile, gems and jewellery will face trade losses,” said Sengupta. ”If the trade deal doesn’t come through and there are further headwinds to growth, then we think that the RBI can ease further and the fiscal space can also be used in terms of supporting sectors like textiles, gems and jewelry and and so on,” he added.

Overall, India’s current account balances and the external balances remain ”quite healthy,” he said. The growth is mainly supported by the services exports which continue to remain strong and remittances until now. ”So we are looking at about 1% of GDP current account deficit. If you don’t have the deal, probably you have a downside of around 20 basis points or or a bit more,” the economist added.

If US tariff-related trade uncertainty persists beyond the March quarter, and weighs more heavily on growth, Goldman Sachs expects room for an additional 25 bps repo rate cut in 2026.

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“We will continue to see relentless growth,” Commerce and Industry Minister Piyush Goyal said, adding India’s merchandise and services exports too have recorded high growth during April-October this fiscal. File
| Photo Credit: The Hindu

Indian businesses are in a “cosy comfort zone” created by the presence of a 1.4 billion-person domestic market, and need to find opportunities globally, Union Commerce Minister Piyush Goyal said on Saturday (August 30, 2025).

In the comments that come amid deep concerns about the impact of high U.S. tariffs on the Indian economy, Mr. Goyal asked India Inc not to get carried away by any “negative narrative” and reminded that the country’s GDP growth has accelerated to 7.8% in June.

Even as it braces for the impact of the U.S.’s tariff moves, Mr. Goyal exuded confidence that the overall exports will grow this year and also pointed out that over $46 billion of the $87 billion exports to the U.S. are unaffected by the tariff moves.

The high growth shown by the official data on Friday (August 29, 2025) did not surprise anybody in the government, Mr. Goyal said, adding that the performance is a “resounding response” to naysayers and pessimists like Rahul Gandhi, the Leader of Opposition in the Lok Sabha, economists and certain sections of the media.

“India is full of resilience, confidence and is raring to continue to be the fastest growing economy for the next 22 years. India will continue to power on. Our exports will continue to grow, we will do higher exports this year than last year and the future is extremely bright,” Mr. Goyal told PTI Videos on the sidelines of an event in Mumbai.

Speaking at the India-UAE Business interaction organised by industry lobby grouping CII here, Mr. Goyal acknowledged that the domestic market is one of the biggest drivers of growth and also spoke candidly on the industry’s role.

“I often feel the large 1.4 billion domestic market has become somewhat a cosy comfort zone in which our businesses make good profit and don’t venture out to look at opportunities around the world,” he said.

Mr. Goyal said the amount of value addition being done by the Indian industry is very low, pointing out how the country is a seller of rice but not rice puffs or ready-to-eat food products, or how it is an iron ore seller but not a high-quality steel exporter.

Citing the case of the fashion industry, where he rued the lack of presence of Indian clothing in high street clothing, Mr. Goyal underlined the need to brand India differently.

Stating that Prime Minister Narendra Modi has instructed him to “trust” both businesses and people, he said the government is keen to work with the industry to solve any obstacles and eager to hear from the businesses.

“Ask for help. Give us your support. Don’t lose out this opportunity. Put pressure on us,” he told the captains of the industry.

On the U.S. tariff impacts, Mr. Goyal said the move by President Donald Trump’s administration should not deter us and asked all to pull up their socks. The U.S. has imposed a 50% tariff on Indian goods, impacting sectors such as textiles and apparel, gems and jewellery, shrimp, leather, and others.

Of the impacted sectors, he said the value add done by the Indian gems and jewellery sector is a low 3% to 4% but acknowledged that we will have to work hard to minimise the impact in the textiles and shrimps exports.

Mr. Goyal said he got on a call with industrialist Noel Tata, who runs the popular Zudio and Westside chains, after the U.S. tariff move and has requested the company to pick-up the U.S. tariffs-impacted goods for sale in local market at a discount till alternative markets are found.

Stating that India always shines in adversity, Mr. Goyal listed out a slew of trade agreements which the government is negotiating currently with the purpose of diversifying the trade basket, and added that the 7.8% GDP growth should serve as a “morale booster”.

Citing the alleged abuse meted out to the Prime Minister in Bihar, Mr. Goyal said, “Such persons truly hurt the India story. But I wish Indian industry would not get carried away by this negative narrative.”.

Mr. Goyal said it is unfortunate that all those who deride their own motherland and the pessimists do not understand simple elementary economics, and reminded them that the export contribution is very low in India, which is primarily a domestically driven economy.

He also affirmed the government’s commitment to reform and do all that is necessary to spur growth, and hoped that the decision coming out of the GST Council meet will be a “sane” one that will give a boost to the domestic demand.

“I can promise you, you (industry) are all going to be immensely pleased after the GST Council meeting,” he added.

Meanwhile, speaking at the same event, the UAE’s Minister for Foreign Trade, Thani bin Ahmed Al Zeyoudi assured that the Gulf nation and India will always be together irrespective of the changes in the world trade order.

“No matter how the world and the partners are dealing with each other, and they’re changing their policies and changing their position against each other, the UAE and India will always be together,” he said.

Published – August 31, 2025 06:07 am IST

Growth in the manufacturing sector quickened to 7.7% in the April-June 2025 quarter, coming on top of a high base of 7.6% in the same quarter of the previous year. File
| Photo Credit: Getty Images

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“India’s economic trajectory stands out in a turbulent global landscape,” Rumki Majumdar, Economist, Deloitte India, said.

The NSO’s first advanced estimates of GDP growth for the year suggest that the economy’s engines will slow to a four-year low this fiscal. Image for representation.
| Photo Credit: Getty Images/iStockphoto

India’s real Gross Domestic Product (GDP) is expected to rise 6.4% in this financial year, slowing from 8.2% in 2023-24, the National Statistics Office (NSO) said on Tuesday (January 7, 2025) in its first advance estimates of GDP for 2024-25. GDP growth slowed to 6% in the first half of this financial year.

The real Gross Value Added (GVA) in the Indian economy is reckoned to rise 6.4% as well, relative to a 7.2% uptick in 2023-24, with Agriculture GVA growth surging to 3.8% from 1.4% last year.

Apart from agriculture, the only other sector expected to record an improvement in GVA growth this year is Public Administration, Defence and Other Services, which the NSO said will rise 9.1% from 7.8% last year.

Manufacturing GVA growth is expected to nearly halve from 9.9% in 2023-24 to 5.3% this year, while GVA in Mining and Quarrying is estimated to rise just 2.9% from 7.1% a year ago.

Construction GVA growth is pegged at 8.6%, from 9.9% in 2023-24 and another key employment-generating sector – Trade, Hotels, Communication and Services related to Broadcasting – is estimated to grow 5.8% as opposed to 6.4% last year.

“Real GDP or GDP at Constant Prices is estimated to attain a level of ₹184.88 lakh crore in the financial year 2024-25, against the Provisional Estimate of GDP for the year 2023-24 of ₹173.82 lakh crore,” the NSO said.

On the expenditure side, private final consumption spends are expected to expand 7.3% from 4% in 2023-24, while government final consumption expenditure is seen rising 4.1% from 2.5% last year.

The NSO’s first advanced estimates of GDP growth for the year, that are used for the framing of the Union Budget for 2025-26 to be presented in February, suggest that the economy’s engines will slow to a four-year low this fiscal and the Budget will have to find ways to revive the growth momentum.

The NSO advised those interpreting the advance estimates to bear in mind that they are likely to undergo revisions thanks to improved data coverage and revision in input data made by source agencies.

“The Second Advance Estimates of Annual GDP for FY 2024-25 along with Quarterly GDP estimates for the quarter October-December of 2024-25 (Q3 2024-25) will be released on 28.02.2025,” the country’s apex statistics office said.

Data released late November had showed India’s GDP growth slipped to a seven-quarter low of 5.4% in the July to September 2024 quarter. Following this, the Reserve Bank of India had pared its growth projection for the full year to 6.6% from 7.2% estimated earlier. Late last month, the Finance Ministry also reframed its growth expectation for 2024-25 from a range of 6.5% to 7%, to around 6.5%.

India’s July-September growth slides: what options does RBI have? | Business Matters

| Video Credit:
The Hindu

Economic growth fell sharply to 5.4% for the quarter ended September. The important question is, what next?

Are we looking at a prolonged slowdown? And as importantly, will the Reserve Bank cut rates, something that observers have been expecting it to do for a while so that lower borrowing costs may spur growth? Or will the latest inflation print of a high 6.2% force its hand to maintain status? 

Presentation and direction: K. Bharat Kumar

Video: Thamodharan B.

Editing: Shibu Narayan

New Delhi:

Prime Minister Narendra Modi today said this is the right time to join India’s growth story, as German Chancellor Olaf Scholz met the Prime Minister in the national capital with a business delegation.

Addressing the 18th Asia-Pacific Conference of German Business 2024, PM Modi said the time is ripe for foreign investors to participate in India’s growth story, and join the ‘Make in India’ initiative and ‘Make for the World’.

“This is the right time to join India’s growth story as the country is becoming a global trade and manufacturing hub,” PM Modi said, adding that the country stands on strong pillars of democracy, demography, demand, and data.

Germany has expressed that India’s skilled manpower is amazing as the European nation has decided to increase visas for the skilled Indian workforce from 20,000 to 90,000.

Chancellor Scholz arrived in Delhi late on Thursday as part of his three-day official visit to India.

The German Chancellor said he wanted to deepen defence ties with India and bring the two countries’ militaries closer.

“Our overall message is clear, we need more co-operation, not less. At our inter-governmental consultations with India, we also want to deepen cooperation in defence and agree to bring our militaries together,” he said.

The German Chancellor will travel to Goa on Saturday, where the German naval frigate ‘Baden-Wuerttemberg’ and combat support ship ‘Frankfurt am Main’ are making a scheduled port call as part of Germany’s Indo-Pacific deployment.

Earlier in the day, Union Commerce and Industry Minister Piyush Goyal emphasised understanding and respecting mutual sensitivities to fast-track India-EU free trade agreement (FTA) talks.

Addressing the Asia-Pacific Conference of German Business, the minister stated that “extraneous” issues like labour and climate change should be discussed at international forums.

“A trade deal could be concluded swiftly if sensitivities were respected on both sides,” Goyal told the Asia-Pacific conference of German business in the Indian capital, attended by German Economy Minister Robert Habeck.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The latest Fitch Ratings has cited a recovery in consumer spending and increased investment. File photo
| Photo Credit: The Hindu

Fitch Ratings on Tuesday, June 18, 2024, raised India’s growth forecast for current fiscal to 7.2 per cent, from 7 per cent projected in March, citing a recovery in consumer spending and increased investment.

For the fiscal years 2025-26 and 2026-27, Fitch projected growth rates of 6.5 per cent and 6.2 per cent, respectively.

“We expect the Indian economy to expand by a strong 7.2 per cent in FY24/25 (an upward revision of 0.2 pp from the March GEO),” Fitch said in its global economic outlook report.

Fitch’s estimates are in line with that of RBI which earlier this month projected Indian economy to expand 7.2 per cent in the current fiscal on the back of improving rural demand and moderating inflation.

Investment to continue, consumer spending to pick up

Investments will continue to rise but more slowly than in recent quarters, while consumer spending will recover with elevated consumer confidence, it said.

Fitch said purchasing managers survey data point to continued growth at the start of the current financial year.

It said signs of the coming monsoon season being more normal should support growth and make inflation less volatile, though a recent heatwave poses a risk.

“We expect growth in later years to slow and approach our medium-term trend estimate,” it said, adding growth will be driven by consumer spending and investment.

The Indian economy grew 8.2 per cent in the last fiscal (2023-24), with a 7.8 per cent expansion in March quarter.

Inflation, Fitch expects, will decline to 4.5 per cent by end 2024 and average 4.3 per cent in 2025 and 2026.

Fitch said it expects the RBI to cut policy interest rates by 25 basis points this year to 6.25 per cent.

New Delhi:

Finance Minister Nirmala Sitharaman on Friday termed 8.2 per cent GDP growth in 2023-24 as ‘remarkable’ and said the growth momentum will continue in the “third term of the Modi Government”.

Today’s GDP data showcases robust economic growth with a growth rate of 8.2 per cent for FY 2023-24 and 7.8 per cent for the fourth or March quarter of FY 2023-24.

“This remarkable GDP growth rate is the highest among the major economies of the world,” Nirmala Sitharaman said in a post on X.

She said the manufacturing sector witnessed a significant growth of 9.9 per cent in 2023-24, highlighting the success of the Modi government’s efforts for the sector.

Many high-frequency indicators indicate that the Indian economy continues to remain resilient and buoyant despite global challenges, she added.

“India’s growth momentum will continue in the third term of PM Shri @narendramodi-led government,” she said.

The last phase of Lok Sabha elections will be held on Saturday while the results will be announced on June 4. 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)