India’s Real GDP Growth Expected To Become More Broad-Based In 2026

India’s GDP: India’s economic momentum is expected to remain strong heading into 2026, supported by coordinated monetary and fiscal measures aimed at reviving domestic demand, according to a report by Standard Chartered. In its report titled “Outlook 2026: Ride the Recovery Wave”, the bank said policy stimulus, including interest rate cuts, liquidity support and tax relief is likely to offset global headwinds such as higher US trade tariffs and a slowdown in world growth.

Policy Support To Drive Demand Recovery

Standard Chartered said front-loaded monetary easing by the Reserve Bank of India and fiscal measures announced by the government are expected to boost consumption and investment.

The RBI has cut the repo rate by 125 basis points in 2025, injected around ₹10 trillion in liquidity and conducted dollar-rupee swaps worth $16 billion. On the fiscal side, income tax cuts and GST rate rationalisation, estimated at about 1% of GDP, are expected to lift household spending.

“These measures keep policy firmly supportive of growth in 2026,” the report said, adding that a consumption-led recovery could lead to upward revisions in growth expectations in the coming months.

Inflation Seen Staying Below RBI Target

The bank expects CPI inflation to remain below the RBI’s medium-term target of 4%, helped by subdued crude oil prices, easing food inflation and lower consumer prices following GST rate cuts.

India’s average consumer inflation fell sharply in 2025, averaging 2.3% until November, compared with 4.9% in 2024, the report noted.

Growth To Broaden Despite Global Risks

While economic activity in 2025 remained uneven, India’s GDP growth strengthened to 8.0% in the first half of 2025–26, compared with 6.4% in 2024–25. Standard Chartered expects growth to become more broad-based in 2026 as domestic demand gains traction.

The report flagged key risks to the outlook, including elevated trade tariffs, global trade disruptions and the possibility of a delayed recovery. However, it said India’s medium-term prospects remain strong due to reforms and policy actions taken in recent years.

(Via Agency Inputs)

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