Fitch lifts India's growth outlook to 6.9% for FY26

Stronger services sector and resilient consumption drive the growth upgrade

- Rhik Kundu

NEW DELHI: Fitch Ratings on Wednesday raised India's growth outlook for the fiscal year ending March 2026 to 6.9%, from its June estimate of 6.5%, citing stronger-than-expected momentum in the services sector and resilient consumption spending from both households and the government.

The Indian economy expanded 7.8% in the first quarter (April-June) of FY26, its fastest pace in five quarters, defying expectations of a slowdown.

"The wedge between nominal and real GDP growth narrowed sharply, with GDP deflator growth (0.9% year-on-year) at its lowest since 3Q19," Fitch noted in its September Global Economic Outlook.

Still, the agency warned that the real GDP may be overstated, given past patterns when wholesale prices were weak and commodity costs were falling. That effect could reverse if prices climb again.