India’s economic growth is projected to remain strong despite global headwinds, with Deloitte South Asia CEO Romal Shetty forecasting India’s GDP to grow at 6.7% in FY26, underpinned by domestic consumption, infrastructure spending, and government reforms. Speaking at a leadership summit, Shetty stated that India’s long-term economic growth prospects remain in the range of 7-8% per annum, making it one of the fastest-growing major economies globally.
India’s Growth Drivers Remain Intact
Shetty noted that India’s resilience is anchored in:
- Strong domestic consumption demand, with a rising middle class
- Continued government focus on infrastructure investments, including roads, railways, airports, and renewable energy
- Digital public infrastructure initiatives such as UPI, Aadhaar stack, and ONDC that are driving financial inclusion and productivity
- Revival in private sector capex in manufacturing and services
“India is well positioned to navigate global volatility due to its large domestic market, demographic dividend, and tech-led productivity gains,” Shetty said.
Sectoral Outlook for FY26
| Sector | FY26 Growth Outlook (%) | Key Drivers |
|---|---|---|
| Manufacturing | 6.5 – 7.0 | PLI schemes, capacity expansions, China+1 shift |
| Services (including IT, BFSI) | 7.5 – 8.5 | Digital transformation, fintech, tourism revival |
| Agriculture | 3.0 – 3.5 | Monsoon dependent, allied sector growth |
| Construction & Infra | 8.0 – 9.0 | Government spending, housing demand |
| Exports | 4.0 – 5.0 | Slower global growth partly offset by competitiveness gains |
Deloitte expects inflation to remain within RBI’s target range for FY26, supporting consumption growth, while the rupee is expected to remain broadly stable despite external uncertainties.
India’s Long-Term Growth Prospects: 7-8%
Shetty highlighted that India has the potential to sustain 7-8% GDP growth over the next decade if structural reforms continue, backed by:
- Labour market reforms to boost formal employment
- Enhancing ease of doing business, regulatory simplification, and judicial efficiency
- Investment in education and skill development to harness the demographic dividend
- Focus on green energy and sustainability, making India an attractive investment destination for ESG-focused global capital
“If India sustains reforms and maintains macro stability, it can double its economy to a $7 trillion GDP by 2033,” Shetty added.
Global Context
While India is set to grow at 6.7% in FY26, Deloitte estimates global GDP growth at around 2.8%, with advanced economies such as the US and Eurozone slowing to 1.5-1.8% amid high interest rates, while China is projected to grow at 4.6% with structural headwinds.
Risks to India’s Growth Outlook
Despite the positive projections, Shetty flagged potential risks:
- Geopolitical uncertainties including oil price volatility and supply chain disruptions
- Persistent high unemployment or underemployment despite GDP growth
- Climate change-related risks affecting agriculture and rural incomes
- Delay in implementation of key reforms
Deloitte’s India GDP Forecasts
| Fiscal Year | GDP Growth Estimate (%) |
|---|---|
| FY25 | 7.0 |
| FY26 | 6.7 |
| FY27 | 7.2 |
| FY28 | 7.4 |
| FY29 | 7.6 |
Deloitte believes India’s growth trajectory will remain robust, supported by both cyclical recovery and structural enablers.
Policy Recommendations
Shetty outlined the following recommendations to sustain high growth:
- Accelerate infrastructure execution through PPP models and financing innovation
- Enhance manufacturing competitiveness by scaling MSMEs and integrating them into global value chains
- Foster research, innovation, and IP creation for global competitiveness in emerging sectors like semiconductors and AI
- Drive financial sector reforms, deepen capital markets, and promote ease of credit
Stock Market and Business Implications
India’s positive macroeconomic outlook is expected to boost:
- Banking and NBFC credit growth, supported by strong retail and infra lending
- Cement, steel, and building materials demand amid infrastructure push
- Auto and consumer durable sales with rising disposable incomes
- IT and digital services exports, as global firms continue outsourcing and digital transformation
Expert Views
An economist at a leading domestic brokerage said:
“Deloitte’s growth forecast aligns with our view of India being the fastest-growing large economy in FY26, aided by policy stability, infrastructure capex, and formalisation gains.”
Conclusion
Deloitte South Asia CEO Romal Shetty’s projection of 6.7% GDP growth for India in FY26 and long-term growth of 7-8% reinforces the narrative of India’s rising economic trajectory despite global uncertainties. Continued reforms, policy consistency, and investments in human capital will be critical in realising this potential and positioning India as a leading global economic powerhouse in the coming decade.
Disclaimer
This news content is for informational purposes only. It is not intended as investment advice. Readers are advised to consult financial experts before making any business or investment decisions based on this report.
