EY raises India's GDP forecast to 6.7%, recommends diversifying markets
- IBEF
- September 30, 2025
EY has revised India’s real Gross Domestic Product (GDP) growth forecast for FY26 to 6.7%, up from 6.5%, citing strong Q1 FY26 performance and demand revival following the recent Goods and Services Tax (GST) reforms. In its September 2025 Economy Watch report, EY highlighted that real GDP grew 7.8% in Q1 FY26, beating the Reserve Bank of India’s 6.5% projection. While robust domestic demand supports growth, the firm cautioned that global headwinds and export uncertainties may limit India’s external trade momentum.
EY India Chief Policy Advisor, Mr. D.K. Srivastava, noted that India’s export and import bases remain narrow, with high dependence on the United States (US) and China. He recommended diversifying markets towards the Brazil, Russia, India, China, and South Africa (BRICS) nations to reduce vulnerabilities. The GST 2.0 reforms, effective earlier this month, lowered rates to 5% and 18% with a special 40% bracket, cutting post-tax prices across textiles, consumer electronics, automobiles, health care, and food items. Fertilisers, agricultural machinery, and renewable energy are also set to benefit through lower input costs, potentially boosting farm incomes. EY expects initial revenue losses to be offset as lower prices stimulate broad-based demand.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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