India’s GDP Growth Revised to 6.5% for FY26: RBI’s Commentary On India Growth Story Deapite Tariffs

The Reserve Bank of India (RBI) has lowered India's real GDP growth estimate for the financial year 2025-26 to 6.5% from the previous estimate of 6.7%. The announcement was made by RBI Governor Sanjay Malhotra in the monetary policy statement on Wednesday.

Follows 9.2% Growth in FY25

Governor Malhotra pointed out that the downward revision occurred in the wake of a robust 9.2% growth the previous year (2024-25), according to the Ministry of Statistics and Programme Implementation (MOSPI).

“The real GDP, as you are all aware, is expected to grow at 6.5% this year, according to the MOSPI figures. This comes on top of the 9.2% growth rate observed in the previous year, 2024-2025", he said in the press conference. 

RBI Projects Growth: Sector Outlook

The RBI is positive about the agriculture sector, with the help of favorable reservoir levels and robust crop production. Manufacturing too is showing improvement, while the services sector remains robust, with a consistent contribution to growth.

Malhotra did admit that though the economy is rebounding from a weaker first half of FY25, growth continues to lag below the desired level.

Demand and Investment on the Rise.

The central bank looks to rural demand remaining robust, boosted by agricultural expansion, with urban consumption increasingly firming with stronger discretionary spending.
On the investment side, Malhotra commented that it has gained momentum and is projected to grow further. 
 

“Investment activity has gained traction and is expected to improve further on the back of sustained higher-capacity utilization, the government’s continued focus on infrastructure spending, healthy balance sheets of banks and corporates, along with the easing of financial conditions,” he added. 

Though the domestic scenario looks optimistic, the RBI warned that merchandise exports are likely to be under pressure due to external uncertainties. Nevertheless, services exports would continue to remain robust, and hence support overall economic momentum.