Indian Economy Set To Clock 6.5 Per Cent Growth In FY26, Backed By Boost In Private Sector Investments: CII

CII President Sanjiv Puri said multiple factors are likely to support India’s growth trajectory, softening interest rates, falling inflation, new personal income tax relief from April 1, etc.

He emphasised that the focus must remain on securing trade pacts that are both mutually beneficial and strategically advantageous for India.

Source : Freepik

India’s economy is set to expand by 6.5 per cent in the current financial year, supported by strong domestic fundamentals and a revival in private sector investments, according to Confederation of Indian Industry (CII) president Sanjiv Puri.

Speaking to PTI, Puri expressed optimism about the country's ability to weather near-term global uncertainties and stressed the need to advance strategic trade partnerships.

“We are looking at 6.5 per cent. We believe this number can be achieved fundamentally, because the fact is, we are starting with a reasonably good foundation, robust economic foundation,” Puri stated, outlining the rationale behind the growth forecast.

He pointed to a combination of factors that are likely to support India’s growth trajectory — softening interest rates, a downward trend in inflation, new personal income tax relief from April 1, and a surge in both public and private investments in the latter half of the previous year.

Trade Pacts Key Amid Rising Protectionism

On the international front, Puri expressed concern over the growing protectionist sentiment and the introduction of new trade barriers, referencing high tariffs proposed by global powers like the US. In response to these developments, he advocated for India to accelerate efforts to sign bilateral trade deals that serve the country's long-term interests.

“More and more barriers to trade are coming in right now,” he noted. “We should do whatever we have to do from a national interest perspective, and I think, most important is these bilateral trade agreements.”

Puri highlighted that among the countries India is currently engaging with, the United States and the European Union are key players. He emphasised that the focus must remain on securing trade pacts that are both mutually beneficial and strategically advantageous for India.

To enhance India’s global competitiveness, Puri also proposed the establishment of a three-tier tariff framework for specific sectors. This, he believes, would help mitigate the challenges posed by evolving trade dynamics.

Domestic Growth Levers and Investment Trends

Turning attention to domestic priorities, the CII president called for a sharper focus on areas such as agriculture, climate adaptation, and sustainability — sectors he believes are vital to boosting long-term economic resilience.

“These domestic drivers of growth and competitiveness are where we should really press the pedal hard so these can kind of offset some of the uncertainties,” he said, adding that further monetary easing could provide additional support to economic activity.

Puri also noted that private sector investment is gaining momentum in key industries, including energy, transportation, hospitality, metals, and chemicals. However, he acknowledged that prevailing geopolitical conditions may cause some hesitation among investors.

On the consumption side, rural demand appears to be gaining strength, while urban demand, although currently subdued, is expected to improve in the coming quarters.

“The rural demand is picking up, while urban has been a little flat, although it also should start moving up in a couple of quarters,” he said.