India’s GDP growth in FY26 will be in 6.4 to 6.7% range: Deloitte

New Delhi: The Indian economy is expected to expand in the range of 6.4-6.7% in the current financial year driven by resilient domestic demands and easing inflation, Deloitte said on Tuesday.

In its latest India Economy Outlook, the consulting firm, however, warned about the global trade pressure and geopolitical uncertainties.

At the heart of India’s growth is its consumption-led economy. Private final consumption accounted for over 61% of GDP in FY 2024-25. With nearly 10 crore middle and high-income households expected to be added by 2030, India is on track to become one of the world’s largest consumer markets, it said.

As per the latest official data, India’s gross domestic product (GDP) expanded by 6.5% in the financial year ended March 2025. As per the government estimate GDP growth in the current financial year is likely to be in the range of 6.3 to 6.8%. The RBI has pegged the current year growth at 6.5%. If these estimates hold, India will maintain its position as one of the fastest growing major economies.

India’s economic trajectory stands out in a turbulent global landscape. Our momentum is driven by a virtuous trifecta -- resilient capital markets, a dynamic consumer base and a globally competitive workforce, said Rumki Majumdar, economist at Deloitte India.

“As trade relations evolve, strategic trade negotiations, notably with the United Kingdom in May and the ongoing talks with the United States, and the highly anticipated deal with the European Union by the end of the year, will likely act as powerful multipliers of income, jobs, market access, and domestic demand,” she said.

Underlining challenges, the consulting firm noted, "As FY 2025-26 unfolds, India must monitor its trade exposure and be prepared for the outcomes of geopolitical uncertainties. The recent regional conflict and restrictions on critical minerals and specialised fertilisers are likely to affect the growth outlook.”

“India’s growth story will be driven by a combination of robust domestic fundamentals and expanding global opportunities, amid uncertainties,” it said.

The report noted that India’s retail inflation dropped to 2.1% in June 2025, the lowest since January 2019, due to decline in food and oil prices.

The twin deficit challenge is easing. The current account balance moved into a surplus of 1.3% of the GDP in Q4 FY 2024–25, the highest in four-and-a-half years. India’s services trade surplus increased to $15.3 billion in June 2025, reaching its highest level, driven by robust IT and consulting exports. Services exports amounted to $31.5 billion, significantly helping to reduce India’s overall trade deficit, the report noted, referring to the strong economic fundamentals.

Meanwhile, the fiscal deficit stood at just 0.8% of the budgeted target in May 2025, compared with 3.1% last year, driven by buoyant revenue collections. India’s 10-year government bond yield has fallen to 6.4%, the lowest since December 2021, reflecting confidence in sovereign bonds and expectations of the Reserve Bank of India’s continued aggressive monetary easing, it added.