India’s real GDP growth for the financial year 2025-26 has been revised downward to 6.5% from the earlier projection of 6.7%, Reserve Bank of India (RBI) Governor Sanjay Malhotra announced during the policy statement on Wednesday.
The revised outlook comes following a strong 9.2% GDP growth recorded in FY 2024-25, according to data released by the Ministry of Statistics and Programme Implementation (MOSPI).
“The real GDP as you are all aware, this year, as per the MOSPI figures, is expected to grow at 6.5 per cent. This is on top of a 9.2 per cent growth rate observed in the previous year, which is 2024-2025,” Malhotra said.
Commenting on the broader economic outlook, the Governor noted that the agriculture sector is poised for a positive year due to strong reservoir levels and robust crop production. He added that manufacturing activity is gaining momentum, with business sentiment remaining upbeat, while the services sector continues to be a pillar of consistent growth.
Though the economy is showing signs of improvement following a relatively sluggish first half in the previous fiscal year, Malhotra acknowledged that the current growth levels still fall short of India’s long-term aspirations.
On the demand front, the Governor pointed to a favourable outlook for rural consumption, supported by expected gains in agriculture. Urban consumption is also on the rise, driven by an uptick in discretionary spending.
Investment activity, he noted, has picked up significantly and is likely to improve further, supported by several structural and fiscal factors.
“Investment activity has gained traction and is expected to improve further on the back of sustained, higher-capacity utilization, government’s continued trust on infrastructure spending, healthy balance sheets of banks as well as the corporates, along with the easing of financial conditions,” he said.
However, Malhotra cautioned that global economic uncertainties may weigh on India’s merchandise exports. Nonetheless, he expressed optimism that the country’s services exports would remain resilient, continuing to support the broader growth trajectory.