Blitz Bureau
NEW DELHI: While US tariff hikes remain a key risk to growth forecast, global credit rating agency Crisil on April 14 projected 6.5 per cent GDP growth for India in fiscal 2026, with risks tilted to the downside. Crisil expects the RBI’s monetary easing to create some offset to the external headwinds.
“Interest rate cuts, income tax relief and easing inflation are expected to provide tailwinds to consumption this fiscal, while the expected normal monsoon will support agricultural incomes,” the report mentioned. Moreover, the anticipated decline in global crude oil prices, resulting from a potential global slowdown, is expected to proide additional support to domestic growth, it added.
That being said, US tariff hikes are a key risk to Crisil’s GDP growth forecast for fiscal 2026, as uncertainty about the duration and frequent changes in tariffs could hinder investments.
In FY25, improved growth in capital, infrastructure and construction goods’ output in the second half points at a gradual pick-up in construction/capital expenditure activity in the latter part of the fiscal. Finally, other high-frequency indicators show growth prospects improving in the fourth quarter.
The latest RBI ‘Quarterly Industrial Outlook’ survey shows a sequential strengthening in demand in the fourth quarter (Q4 FY25).
“The latest RBI Consumer Confidence Survey indicates an improvement in March, in both rural and urban areas. All these factors corroborate the recovery in domestic demand. Healthy rabi output and easing inflation in the fourth quarter also bode well for consumption demand,” the report mentioned.
Industrial growth, as measured by the Index of Industrial Production (IIP), slowed to 2.9 per cent in February from 5.2 per cent in January (revised up from 5.0 per cent), driven by lower output growth in the mining and manufacturing sectors, while electricity recorded an uptick.
“On average, IIP growth stood at 4.0 per cent in the fourth quarter as of February, broadly in line with the 4.1 per cent recorded in the December quarter,” said Crisil.
