EY, ICRA Revise FY26 GDP Forecasts: EY Sees 6.7% Growth, ICRA Estimates 6.5%

India’s real gross domestic product (GDP) growth for the financial year 2025-26 (FY26) has been revised upwards by leading agencies, reflecting a stronger economic performance and recent policy measures.

EY has raised India’s FY26 GDP projection to 6.7 per cent, up from its earlier estimate of 6.5 per cent. The upgrade comes in light of a robust 7.8 per cent GDP growth in Q1FY26 and the impact of Goods and Services Tax (GST) reforms, according to EY’s September 2025 Economy Watch report.

“While global headwinds continue to constrain India’s export prospects, strong domestic demand and GST-driven reforms are expected to sustain a healthy annual growth rate of 6.7 per cent,” said DK Srivastava, Chief Policy Advisor, EY India. He highlighted that ongoing tariff uncertainties and supply chain disruptions present an opportunity for India to diversify its trade, especially with BRICS countries, reducing dependence on the US and China.

In a similar revision, ICRA has projected India’s real GDP growth at 6.5 per cent for FY26, up from its previous forecast. The rating agency attributed this upward revision to recent policy interventions, including GST rationalisation, and the strong economic performance recorded in the first quarter.

ICRA expects nominal GDP growth of 8.3 per cent, noting that inflation moderation through GST rate cuts could potentially allow the Reserve Bank of India to consider rate cuts if growth momentum continues. “While the immediate impact on CPI inflation may be limited, long-term GST benefits are likely to stimulate demand across sectors, supporting sustainable economic growth,” said ICRA Chief Economist Aditi Nayar.

Both EY and ICRA’s revisions signal optimism for India’s economic trajectory in FY26, underscoring the combined effects of domestic reforms and strategic trade adjustments amid global uncertainties.