India's economic landscape continues to show strong growth trajectories, with Chief Economic Advisor V. Anantha Nageswaran confirming that the nation's economy is set to exceed USD 4 trillion in the ongoing fiscal year (FY26). This follows the economy already crossing the USD 3.9 trillion mark by the end of March 2025, solidifying its standing as the fifth-largest economy globally.
Reinforcing this positive outlook, S&P Global Ratings has projected India's economy to grow by 6.5% in FY26 and further to 6.7% in FY27. This growth is largely attributed to resilient domestic consumption, strategic tax cuts, and accommodative monetary policy. Notably, the Union Budget 2025-26 raised the income-tax rebate threshold to ā¹12 lakh, providing significant relief to middle-class taxpayers, while the Reserve Bank of India implemented key policy rate cuts, further stimulating demand.
The Reserve Bank of India's (RBI) monthly bulletin for October indicated sustained economic momentum, bolstered by robust manufacturing and services sector activity, festive demand, and the positive impact of GST reforms. Inflation has also eased to a historic low, primarily due to lower food prices and GST rate reductions. However, the bulletin also highlighted a record widening of the merchandise trade deficit in October, as imports surged (driven by gold and silver purchases for festive demand) and exports contracted due to global weaknesses.
In response to global trade dynamics, Union Commerce and Industry Minister Piyush Goyal has underscored the critical need to expand India's economy and create employment opportunities by boosting exports. He noted the resilient performance of Indian exports and the government's steadfast commitment to accelerating export growth. India is actively pursuing new trade avenues, with negotiations set to commence for an early harvest trade deal with Israel and formal Free Trade Agreement (FTA) talks with the Russia-Led Eurasian Economic Union.
The manufacturing sector is also witnessing significant acceleration, largely propelled by the implementation of the Bureau of Indian Standards' (BIS) Quality Control Orders (QCOs). These QCOs are playing a pivotal role in enhancing product quality, reducing dependence on imports, and improving India's export readiness by aligning with global benchmarks.
On the stock market front, Indian benchmark indices, Sensex and Nifty50, closed lower on November 25, influenced by the monthly expiry of Nifty F&O contracts. Despite this, broader markets, including the Nifty Midcap 100 and Nifty Smallcap 100 indices, showed relative outperformance.