Trade & Trends

Amid economic and geopolitical uncertainties, we look at the promise and perils for different sectors in 2026

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GDP Growth: On A Firm Footing

India's growth outlook for FY26 remains firm, supported largely by domestic demand, even as global trade conditions are unsettled due to higher US tariffs and slowing external demand.

India closed FY25 with real GDP growth of 6.5 percent, marginally below the Reserve Bank of India's (RBI) projection of 6.6 percent. In an economic overview released on December 29, the government said real GDP grew 8.2 percent in the second quarter of FY26, up from 7.8 percent in the first quarter, driven by private consumption and steady expansion in industrial and services activity.

Consumer price inflation hit a three-month high of 1.33 percent in December. For FY26, the RBI cut its inflation forecast to 2 percent, citing lower food prices and improved supply chains.

The central bank has raised its GDP growth forecast for FY26 to 7.3 percent, from an earlier estimate of 6.8 percent.

Global institutions have also maintained a positive outlook. The Organisation for Economic Cooperation and Development projects India's GDP to grow 6.7 percent in FY26 while the International Monetary Fund expects it to be 6.6 percent. The Asian Development Bank has upgraded India's growth forecast to 7.2 percent.

Ratings agencies Moody's, S&P Global and Fitch Ratings expect a growth of 6.4 percent, 6.5 percent growth and 7.4 percent, respectively.

- Vasudha Mukherjee

Rupee: Arresting The Slide

In 2025, the rupee reported its largest annual fall in three years, hurt by record foreign fund outflows (₹1.04 lakh crore, based on NSDL data). The rupee closed 2025 at 89.87, marking a decline of 4.7 percent.