S&P raises India's FY26 GDP growth estimates to 6.5%

New Delhi: S&P Global Ratings on Tuesday raised India's GDP forecast for current fiscal to 6.5 per cent assuming a normal monsoon, lower crude oil prices and monetary easing.

S&P, also, flagged rising risks to the global economy due to the turbulence in the Middle East saying long-lasting major increases in oil prices could have significant economic impact in Asia-Pacific, notably via slower global growth and pressure on the current accounts of net energy importers, prices and costs.

"However, current conditions on global energy markets--which are well-supplied-- make such long-term impact on oil prices unlikely," S&P said.

India is 90 per cent dependent on imports to meet its crude oil needs and buys roughly half of its natural gas from overseas.

S&P had last month lowered India's FY26 growth estimates by 20 basis points to 6.3 per cent citing global uncertainties and US tariff shocks.

In its Asia Pacific Economic Outlook released on Tuesday, S&P said domestic demand resilience is particularly relevant in limiting the economic slowdown in economies less exposed to goods exports such as India.

"we see India's GDP growth holding up at 6.5 per cent in fiscal 2026 (year ending March 31, 2026). That forecast assumes a normal monsoon, lower crude oil prices, income-tax concessions and monetary easing," S&P said.

S&P's growth estimates for India is in line with the projections made by central bank RBI earlier this month at 6.5 per cent.

In the report, S&P said it expects the increase in US import tariffs and the uncertainty about them to harm trade, investment and growth globally.

The crisis in the Middle East has escalated over the last 12 days with US military strikes on Iran's three most critical nuclear facilities. US joined the war against Iran after Israeli strikes and counterstrikes by Iran.