India, Dec 15 ; India’s economy is set to grow at 7 per cent in the current fiscal year 2025-26, rating agency Crisil said on Monday as it raised its growth projection by 50 basis points, citing strong first-half performance and supportive domestic factors.
Crisil revised its forecast after India posted a robust 8 per cent growth in the first half of the fiscal, beating market expectations. “We expect GDP to grow at 7 per cent in fiscal 2026, compared with 6.5 per cent in fiscal 2025,” the agency said in a report.
According to Crisil, domestic consumption will remain the key growth driver, aided by benign inflation, GST rationalisation and income tax relief. However, it cautioned that risks from higher US tariffs could impact exports and investment flows, even as a potential US-India trade deal remains under watch.
India’s GDP growth touched a six-quarter high of 8.2 per cent year-on-year in the second quarter of FY26, up from 7.8 per cent in the previous quarter, supported by strong consumption demand and benefits from the GST rate rationalisation undertaken in September 2025. Nominal GDP growth, however, moderated slightly to 8.7 per cent from 8.8 per cent.
The Reserve Bank of India has also raised its full year GDP growth projection to 7.3 per cent, an increase of 50 basis points.
On the inflation front, Crisil expects consumer price index (CPI) based inflation to ease sharply to 2.5 per cent in FY26 from 4.6 per cent in FY25. It attributed the moderation to a sharper than expected fall in food inflation, healthy agricultural output, benign global crude oil prices and the impact of GST rate cuts.
Retail inflation fell to 0.3 per cent in October from 1.4 per cent in September, the lowest level in the current CPI series, before inching up marginally to 0.71 per cent in November on a provisional basis. The RBI has revised its CPI inflation forecast for FY26 to 2.0 per cent, down from an earlier estimate of 2.6 per cent.
In this environment of low inflation, Crisil said the RBI’s monetary policy remains open to further rate cuts, though decisions are likely to stay data-dependent amid global uncertainties. The Monetary Policy Committee cut the repo rate by 25 basis points in its December meeting, maintaining a neutral stance. RBI Governor Sanjay Malhotra described the current macroeconomic situation as a “rare Goldilocks period” marked by strong growth and exceptionally low inflation.
On crude oil prices, Crisil expects Brent crude to average USD 60–65 per barrel in calendar year 2026, lower than the estimated USD 65–70 per barrel in 2025. Brent crude averaged USD 63.6 per barrel in November, down 1.6 per cent month-on-month and 14.5 per cent year-on-year.