BMI Projects India Economic Growth Slows to 6.6 Percent

BMI, a company within the Fitch Group, projects that India's economic growth will slow to 6.6 percent in the 2026-27 fiscal year, down from 7.7 percent in the 2025-26 period. The firm attributes this moderation to the waning effects of Goods and Services Tax reforms implemented in September 2025, which had previously rationalized tax slabs and reduced rates on 375 items.

Elevated inflation, averaging 5.4 percent, is also expected to erode household incomes and dampen growth. Despite this slowdown, India is expected to remain the fastest-growing large economy in the Asia-Pacific region.

BMI identified several downside risks that could further impact the economy, including a weaker monsoon and potential conflict escalation between the United States and Iran. Such geopolitical instability could push oil prices above the baseline of 86 USD per barrel, further reducing real incomes and private consumption across the region.