India Set To Grow At 6.5-6.8 Per Cent In FY25, Domestic Consumption To Play Key Role In Growth: Deloitte

Other factors such as the authorities’ consistent focus on infra development, digitisation, and lucrative FDI yields would help the country grow and enhance overall efficiency, the report said

The analyst said that domestic consumption is expected the remain the cornerstone of the domestic economic growth, with both rural and urban demand set to play crucial role.

Source : ABPLIVE AI

Indian economy is expected to grow at 6.5 per cent to 6.8 per cent in the current fiscal year, Deloitte said on Sunday. The study estimated the economy to clock a growth rate between 6.7 per cent to 7.3 per cent in the 2025-26 fiscal year (FY26), backed by domestic consumption.

Speaking to PTI, Rumki Majumdar, Deloitte India Economist, noted, “The growth in the first half of the fiscal year 2025 turned out to be slower than estimated as election uncertainties followed by disruptions in activity due to heavy rainfall and geopolitical events weighed on domestic demand and exports. However, India continues to show resilience in certain pockets that are worth noting -- be it in consumption trends, services growth, the rising share of high-value manufacturing in exports, or the capital market.”

The economist stated that other factors such as the authorities’ consistent focus on infrastructure development, digitisation, and lucrative FDI yields would help the country grow and enhance overall efficiency. “We remain cautiously optimistic and expect the growth rate to remain between 6.5 and 6.8 per cent this fiscal year and slightly higher between 6.7 and 7.3 per cent in FY2026,” the expert said.

Notably, the Reserve Bank of India earlier this month slashed its growth forecast for the 2024-25 fiscal year (FY25) to 6.6 per cent from 7.2 per cent estimated earlier in June. However, Deloitte pointed out that manufacturing exports in high-value segments such as chemicals and semiconductors indicate the country’s strengthening position in the global value chains.

The analyst said that domestic consumption is expected the remain the cornerstone of the domestic economic growth, with both rural and urban demand set to play crucial role. Majumdar added, “A myriad of factors, such as improved agricultural incomes, targeted subsidies, social welfare programmes, government employment initiatives, advancements in digitisation, and stronger services sector growth will help broad-base consumption spending.”

Challenges For Indian Economy

In terms of challenges for the Indian economy, the expert said that global headwinds such as trade disputes, supply chain disruptions, geopolitical conflicts, and the increasing impact of climate change remain major obstacles for the country. 

“Over the next few years, India's growth will hinge on its ability to economically decouple from global uncertainties. The Indian economy has the opportunity to turn the lime into lemonade by focusing on three factors. The first would be to build on its own strengths. The second would be the emphasis on building a self-reliant manufacturing sector that will not only meet India's rising domestic demand but also integrate with the global value chain. Also, by advancing digitally delivered services and targeting high-value segments of global value chains, India can capitalise on opportunities, even amid nearshoring and deglobalisation trends,” she concluded.