India’s economy likely to grow by 6.7% in FY26 on cyclical recovery

India's economy is set to grow at 6.7 per cent in FY26, driven by a cyclical recovery and steady market performance, a new report said.

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Cyclical recovery refers to the phase in an economic cycle that follows a recession or slowdown, during which economic activity, consumer spending, and business investments start to rise.

Over the past five years, India has witnessed strong earnings growth, with the NIFTY index recording a 20 per cent compound annual growth rate (CAGR), according to a Lighthouse Canton report.

As the economy moves forward, the next phase of growth will depend on key factors such as government capital expenditure, tax benefits for the middle class, and improved consumer demand.

These elements are expected to support earnings recovery and market confidence in 2025, the report said.