India GDP growth is expected to witness significant momentum in 2025-26, driven by strong government investment and rising consumer spending, according to the Federation of Indian Chambers of Commerce and Industry (FICCI). Despite global challenges, India’s economic outlook remains positive, supported by key policy initiatives and strategic opportunities.
Government Capital Expenditure to Boost India GDP Growth
FICCI’s report highlights that the government’s focus on capital expenditure will continue to be a cornerstone of India GDP growth in 2025-26. Investments in infrastructure, including roads, railways, housing, and logistics, are set to fuel economic activity and create a ripple effect across various sectors. These projects aim to enhance connectivity, modernise facilities, and drive long-term development.
Rising Consumer Spending to Strengthen Economic Outlook
Consumer spending is projected to play a crucial role in India GDP growth. Improved agricultural performance is expected to enhance rural consumption, while easing food inflation will provide relief to households. Additionally, anticipated monetary easing by the Reserve Bank of India (RBI), such as lower interest rates, could further encourage consumer demand, adding momentum to the economy.
Balanced GDP Growth Forecast Amid Global Challenges
FICCI estimates India GDP growth for 2025-26 to range between 6.5% and 6.9%, reflecting a balanced perspective that accounts for global uncertainties. While trade tensions and policy shifts under the new US administration may pose short-term challenges, India’s position as a key player in global supply chain diversification is expected to strengthen its economic prospects.
Inflation and Strategic Opportunities to Shape India’s Growth
The report forecasts inflation easing to 4.8% in 2024-25, aligning with RBI’s projections, which will help stabilise household budgets. Additionally, India GDP growth stands to benefit from targeted industrial policies, lower global oil prices, and strategic tariff reductions aimed at fostering trade and minimising domestic disruptions.