ADB hikes India's economic growth estimate to 7.2% for FY26 on robust consumption

The Asian Development Bank (ADB) has hiked Indias economic growth estimate for FY26 to 7.2% from its earlier projection of 6.5%. It noted that this is primarily due to a wave of domestic demand pushed by the recent tax reductions, giving the economy stronger momentum than previously expected. It also highlighted stronger second-quarter expansion as tax cuts supported consumption. ADB noted that following stronger-than-anticipated growth in Q3, India's 2025 growth projection is upgraded, driven primarily by robust domestic consumption supported by recent tax cuts. Risks remain balanced, with downside risks coming from potential escalation of trade tensions and weather-related shocks, while upside potential could emerge if trade negotiations with the US yield a lower tariff rate for India. ADB also trimmed its inflation projections for India with the FY26 estimate cut to 2.6 per cent from 3.1 per cent, supported by favourable monsoon patterns, strong agricultural output, and the impact of GST rate adjustments.

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