<p>Bengaluru: India’s GDP is expected to be steady at 6.5 per cent in the next financial year (FY26), despite the current uncertainties stemming from geopolitical turns and trade-related issues led by the US tariff actions, but what the future holds is still left to speculation, according to credit rating agency Crisil.</p>.<p>It is clear that the current scenario is no reflection of the future clouded by several uncertainties, observed panelists at Crisil's webinar on Thursday.</p>.<p>For one, with the tariffs imposed on China, the country is currently in a state of oversupply. There is a fear of dumping when it comes to commodities like steel, which may flood other Asian countries like India.</p>.<p>Excess capacity in China can also make producers conservative on investment plans. While domestic demand seems to be improving, going forward, a clear picture of how much consumption demand will be hit with reciprocal tariffs, retaliations, and non-tariff barriers, is yet to emerge, the panelists added.</p>.Zomato, Swiggy, Zepto face antitrust case over alleged deep discounting.<p>Another question in the air is the damage of the tariff war, making the outcome foggy, wherein it is not just about the quantum of tariffs imposed on Indian products but what is imposed on other countries with which India competes.</p>.<p>Given the tariff war and the subdued global growth environment, India’s goods exports are expected to face further headwinds in fiscal 2026.</p>.<p>When it comes to exposure to the US market, a few sectors in India have high exposure including aluminum, steel, pharmaceuticals, auto components, textiles, gems and jewellery.</p>.<p>Still, the steady GDP forecast is based on assumptions like another spell of normal monsoon and commodity prices continuing to remain soft. Urban consumption is also expected to be revitalised.</p>.<p>The recent softening in food inflation is expected to continue in FY26, along with another 50-75 basis point rate reduction over the next fiscal. However, slowing US Fed rate cuts and limited ability to predict weather in the changing climate could influence the timing and quantum of these cuts.</p>.<p>Crisil foresees both manufacturing and services supporting growth through FY31. Manufacturing growth is expected to average 9% per year over FY25 to FY31. As a result, the share of manufacturing in GDP will increase to 20%.</p>.<p>At the same time, given the unevenness of demand and uncertain global environment, it will take time before the private capex and overall corporate sector sees a sustained revival.</p>
<p>Bengaluru: India’s GDP is expected to be steady at 6.5 per cent in the next financial year (FY26), despite the current uncertainties stemming from geopolitical turns and trade-related issues led by the US tariff actions, but what the future holds is still left to speculation, according to credit rating agency Crisil.</p>.<p>It is clear that the current scenario is no reflection of the future clouded by several uncertainties, observed panelists at Crisil's webinar on Thursday.</p>.<p>For one, with the tariffs imposed on China, the country is currently in a state of oversupply. There is a fear of dumping when it comes to commodities like steel, which may flood other Asian countries like India.</p>.<p>Excess capacity in China can also make producers conservative on investment plans. While domestic demand seems to be improving, going forward, a clear picture of how much consumption demand will be hit with reciprocal tariffs, retaliations, and non-tariff barriers, is yet to emerge, the panelists added.</p>.Zomato, Swiggy, Zepto face antitrust case over alleged deep discounting.<p>Another question in the air is the damage of the tariff war, making the outcome foggy, wherein it is not just about the quantum of tariffs imposed on Indian products but what is imposed on other countries with which India competes.</p>.<p>Given the tariff war and the subdued global growth environment, India’s goods exports are expected to face further headwinds in fiscal 2026.</p>.<p>When it comes to exposure to the US market, a few sectors in India have high exposure including aluminum, steel, pharmaceuticals, auto components, textiles, gems and jewellery.</p>.<p>Still, the steady GDP forecast is based on assumptions like another spell of normal monsoon and commodity prices continuing to remain soft. Urban consumption is also expected to be revitalised.</p>.<p>The recent softening in food inflation is expected to continue in FY26, along with another 50-75 basis point rate reduction over the next fiscal. However, slowing US Fed rate cuts and limited ability to predict weather in the changing climate could influence the timing and quantum of these cuts.</p>.<p>Crisil foresees both manufacturing and services supporting growth through FY31. Manufacturing growth is expected to average 9% per year over FY25 to FY31. As a result, the share of manufacturing in GDP will increase to 20%.</p>.<p>At the same time, given the unevenness of demand and uncertain global environment, it will take time before the private capex and overall corporate sector sees a sustained revival.</p>