Indian economy on strong footing: S&P Global Ratings has revised India’s GDP growth projection upwards for the ongoing fiscal year to 6.5%, considering factors such as anticipated normal monsoon, reduced crude oil prices and monetary easing.The forecast raise comes at a time when the global economy is in a fragile state and geopolitical tensions and US President Donald Trump’s tariff moves are adding uncertainty to growth outlook.S&P highlighted increasing concerns for the global economy due to Middle East unrest, noting that sustained high oil prices could significantly impact Asia-Pacific through reduced global growth and strain on current accounts of energy-importing nations, affecting prices and expenses.“However, current conditions on global energy markets–which are well-supplied– make such long-term impact on oil prices unlikely,” S&P said.Also Read | Nightmare scenario: How Iran, hit by US & Israel strikes, may choke world’s oil supply via Strait of Hormuz – explainedIndia relies heavily on imports, with 90% of its crude oil requirements and approximately half of its natural gas needs sourced from international markets.Previously in March, S&P had reduced India’s FY26 growth forecast by 20 basis points to 6.3 per cent, citing worldwide uncertainties and US tariff impacts.
Why S&P has raised India’s GDP growth outlook
In its Tuesday release of Asia Pacific Economic Outlook, S&P indicated that strong domestic demand particularly helps limit economic deceleration in countries with lower exposure to goods exports, such as India.“We see India’s GDP growth holding up at 6.5 per cent in fiscal 2026 (year ending March 31, 2026). That forecast assumes a normal monsoon, lower crude oil prices, income-tax concessions and monetary easing,” S&P said.The growth projections by S&P align with the Reserve Bank of India’s recent forecast of 6.5 per cent made earlier this month.Also Read | Reducing acute dependence, countering China’s near monopoly: India readies Rs 5,000 crore scheme for rare earth mineralsS&P’s report indicates that elevated US import duties and the associated uncertainty would adversely affect global trade, investments and economic expansion.The situation in the Middle East has intensified during the past 12 days, with American forces targeting Iran’s three primary nuclear installations. The United States entered the conflict following exchanges between Israel and Iran.
