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Our India coverage provides detailed analysis, independent forecasts, and economic outlooks for India’s economy and financial markets. We offer rapid responses to new data and developments, along with in-depth coverage of key themes, current trends, and future economic dynamics.

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Our View

Economic outperformance in the face of tariff threat

India’s economy has had a strong first half of the year and is poised to grow by 7% in both 2025 and 2026, making it a global outperformer. The recent sharp drop in inflation has enabled the Reserve Bank of India to frontload its easing cycle and we think that rate cuts have now come to an end. The trade war is a mixed blessing for India in the near term, but the economy is well-placed to benefit from global supply chain reconfiguration over the medium term. 

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Main Economic & Market Forecasts

% y/y unless stated

Latest

Q1 2025

Q2 2025

Q3 2025

2025

2026

2027

GDP

+7.4

+7.4

+7.1

+7.0

+7.0

+7.0

+6.5

Consumer Prices

+2.8*

+3.7

+3.1

+3.6

+3.6

+4.6

+4.7

Current Account (4Q Sum, % of GDP)

 -0.9

-1.3

-1.4

-1.3

-1.5

-1.5

-1.5

Repo Rate %

5.50

6.25

5.50

5.50

5.50

6.00

6.00

Standing Deposit Facility %

5.25

6.00

5.25

5.25

5.25

5.75

5.75

Cash Reserve Ratio %

3.00

4.00

3.00

3.00

3.00

3.00

3.00

10-Yr Government Bond Yield %

6.30

6.60

6.40

6.25

6.25

6.25

6.25

INR/US$

85.5

85.5

86.1

86.7

88.0

90.0

90.0

Sensex

82,055

77,415

82,100

83,800

87,000

95,000

97,000

Sources: Bloomberg, CEIC, Capital Economics; *May; End of period.