India's​‍​‌‍​‍‌​‍​‌‍​‍‌ economy is set to expand at a pace that is quicker than the projections made earlier this fiscal year. The economists are now predicting that the GDP growth will average 6.7% in FY26 which is a tad bit higher than the 6.6% forecast of the previous month.

The upbeat revision is largely due to a stronger than expected 7.8% growth in the April-June quarter. The upturn in the forecast is largely due to the revival of consumer demand which is the result of a festive season GST cut, and fiscal and monetary measures that are geared towards supporting the economy.

Although a 50% U.S. tariff on Indian exports continues to hamper the situation, bright signs from Washington and New Delhi have lit the hope of a decrease in the tariff that will lift the trade sentiment.

Most of the economists 68% of those surveyed believe that the Reserve Bank of India (RBI) will reduce the repo rate by 25 basis points in December after the inflation starts to ease.

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The poll sees inflation averaging 2.5% this fiscal year, and rising to 4.2% next year. There is an expectation that the rates will be kept on hold till about mid-2027 after the proposed cut.

Sakshi Gupta, principal economist at HDFC Bank says that the growth optimism is due to policy support and rural resilience. While Abhishek Upadhyay, senior economist at ICICI Securities stated that the easing of tariff pressures could further strengthen growth in the second half of the fiscal year.

The private investment recovery remains a concern due to the global uncertainties, and economists have pointed out that the continuation of policy stability will be a deciding factor for capital formation and the growth momentum in the long ​‍​‌‍​‍‌​‍​‌‍​‍‌run.