India's economy is demonstrating strong performance and a positive macroeconomic outlook, according to recent reports and projections. The International Monetary Fund (IMF) anticipates India's economy to grow at 6.6% in the fiscal year 2025-26 (FY26), building on a 6.5% growth in FY25 and a robust 7.8% expansion in the first quarter of FY26. The IMF highlighted that recent Goods and Services Tax (GST) reforms are playing a crucial role in cushioning the economy from external challenges, including high US tariffs.

GDP Growth Expectations and IMF's $5 Trillion Target

Expectations are soaring for India's Q2 FY26 GDP growth figures, set to be released on November 28. Projections from institutions like the Union Bank of India suggest a significant growth of 7.5% for the quarter, a notable increase from 5.6% in Q2 FY25. A finance ministry report also indicated that Q2 FY26 real GDP growth could be in the range of 7-7.5%, reflecting sustained strength in economic activity. This anticipated strong performance is expected to maintain India's position as a leading global economic growth engine.

However, the IMF has revised its timeline for India achieving the $5 trillion economy milestone, now expecting it to be reached by FY29, a year later than previous projections. This adjustment is attributed to slower-than-expected nominal growth and a sharper depreciation of the Indian rupee.

Impact of GST Reforms, Consumption, and Inflation

The rationalization of GST rates has provided a measurable boost to consumption across the country. Indicators such as increased e-way bill generation, record festive-season automobile sales, robust UPI transaction values, and a notable rise in tractor sales point to broad-based improvements in both urban and rural demand. This positive impact on consumption is expected to become even more evident in the coming quarters.

Furthermore, GST reductions, coupled with a favorable base effect and subdued food prices, have contributed to retail inflation reaching an all-time low of 0.25% in October 2025. This contained inflation, along with fiscal consolidation and a controlled current account deficit, has strengthened India's economic stability.

Corporate Performance and Agricultural Outlook

The corporate sector demonstrated resilient performance in Q2 FY26, with net sales growing by 6.1% year-on-year and net profits surging by 12.3%. Profit margins have continued to strengthen, with Profit After Tax (PAT) as a share of total income reaching an estimated 11.1%, one of the highest in recent years, indicating robust corporate balance sheets.

In agriculture, the Rabi season has started promisingly, with total Rabi sowing increasing by 14.8% year-on-year. Wheat sowing saw a 19.9% rise, and gram sowing was up by 8.9%, supported by healthy reservoir levels and favorable moisture conditions.

External Factors and Market Performance

Despite domestic strengths, India faces external headwinds, notably the 50% tariffs imposed by the US. The rupee has also experienced a significant depreciation, plunging to a record low of approximately 90 to the dollar. A faster Indo-US trade deal could potentially offer relief to the export sector.

On the financial markets front, Indian benchmark indices Sensex and Nifty50 closed higher on November 27, 2025, after hitting new lifetime highs during intraday trade. The BSE Sensex ended at 85,720.38, up 110.87 points (0.13%), while the NSE Nifty50 settled at 26,215.55, up 10.25 points (0.04%). This market optimism is fueled by expectations of potential interest rate cuts by the US Federal Reserve, easing inflation in India, strong domestic demand, and improved Q3 demand patterns. Key gainers on the Sensex included Bajaj twins, ICICI Bank, Hindustan Unilever (HUL), and HCLTech, while Infosys saw a decline of over 2%. In corporate news, Wipro announced a strategic alliance with the Indian Institute of Science (IISc) and the Foundation for Science Innovation and Development (FSID) to advance agentic AI, embodied AI, quantum AI, and quantum-safe solutions. Salasar Techno Engineering secured two contracts worth ₹695.18 crore from Rail Vikas Nigam Ltd (RVNL).