Mumbai: The Reserve Bank of India (RBI) lowered India’s gross domestic product (GDP) growth forecast for 2025-26 (FY26). The apex bank lowered the GDP forecast to 6.5 per cent from 6.7 per cent. The decision was announced on Wednesday after the Monetary Policy Committee’s (MPC) 54th meeting, chaired by RBI Governor Sanjay Malhotra.
The downward revision was driven by uncertainties in global trade, a weaker external demand outlook, and potential headwinds from financial market volatility. This comes as the United States’ reciprocal tariffs come into effect. Indian imports to the US will now face a 26 per cent tariff. A 25 per cent tariff has been levied on auto and auto part imports, with more tariff announcements expected to follow in the coming days.
RBI Governor Sanjay Malhotra said that prospects of agriculture sector remain bright on the back of healthy reservoir levels and robust crop production in 2025-26. Manufacturing activity is showing signs of revival with business expectations remaining robust, while services sector activity continues to be resilient, he said.
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Taking all these factors into consideration, he said, real GDP growth for 2025-26 is now projected at 6.5 per cent, with Q1 at 6.5 per cent; Q2 at 6.7 per cent; Q3 at 6.6 per cent; and Q4 at 6.3 per cent.
‘While the risks are evenly balanced around these baseline projections, uncertainties remain high in the wake of the recent spike in global volatility. It may be noted that the growth projection for the current year has been marked down by 20 basis points relative to our earlier assessment of 6.7 per cent in the February policy,’ RBI Governor Sanjay Malhotra said.
The National Statistics Office (NSO) estimates India’s GDP growth at 6.5 per cent for FY25, following 9.2 per cent growth in FY24. For the ongoing financial year, the NSO has also revised its GDP growth projection to a steady 6.5 per cent growth.
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