S&P Global Ratings has revised India’s gross domestic product (GDP) growth forecast for the fiscal year 2025-26, to 6.5 percent, lower than th e6.7 percent projected earlier, it said in a statement on Wednesday, March 26.
The global credit rating agency cited external pressures, including rising US tariffs and a broader pushback against globalisation, as key factors contributing to the downward revision.
“We expect India’s GDP to grow at 6.5 percent in 2025-26, which is in line with the growth rate of the previous fiscal year. However, this is lower than our earlier estimate of 6.7 percent,” S&P said in the statement.
Supporting factors for India’s economy include easing food inflation, tax benefits announced in the national budget for 2025-26, and a favourable environment for discretionary consumption, as lower borrowing costs are expected to continue fuelling spending.
The agency emphasised that while Asia-Pacific economies, including India, will face pressures from external factors such as rising US tariffs and trade disruptions, the region's emerging markets are likely to experience stable domestic demand momentum.
“In the face of rising US tariffs and other geopolitical challenges, the region’s economies are demonstrating resilience,” the report said, referencing US trade policies like increased tariffs on imports from China, Canada, and Mexico, and steel and aluminium tariffs, as well as plans for tariffs on sectors such as automobiles and semiconductors.