India's FY26 Growth Outlook Brightens: RBI Cuts Rates, Lifts GDP Forecast as Reforms Target Trade and Inflation

India's economy is projected to grow at 7% or above in FY26, underpinned by strong domestic demand, low inflation, GST rate cuts and an 8.2% GDP surge in the July'September quarter, which marked a six-quarter high and reinforced India's status as the fastest-growing major economy.

RBI has cut the repo rate by 25 bps, raised its GDP growth forecast to 7.3% and lowered inflation expectations to 2%, even as higher US tariffs, a wider trade deficit and a rupee that has weakened about 5% in 2025 after breaching 90 per dollar pose external risks, prompting the government to prioritise customs simplification as the next big reform before Budget 2026.

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