NEW DELHI: India’s economic growth for the current fiscal is projected at 6.3%, slightly below the Reserve Bank of India’s estimate of 6.5%, according to a SBI Research Report released on Thursday.
The report estimated first-quarter GDP growth at 6.8-7%, primarily due to subdued private investment. For 2025-26, India’s economy is expected to expand 6.3-6.8%, supported by strong macroeconomic fundamentals, although careful policy management will be necessary to navigate global headwinds, the latest Economic Survey noted.
The country’s growth slowed to 6.5% in 2024-25 (April 2024 to March 2025) from 9.2% the previous year. Quarterly projections indicate GDP growth of 6.5% in Q2, 6.3% in Q3, and 6.1% in Q4 of the current fiscal year. In comparison, the RBI has projected GDP growth at 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4.
A key challenge for sustained growth remains muted private capital expenditure. A survey of 2,170 enterprises across sectors including agriculture, manufacturing, and IT found that intended capex for FY26 is significantly lower than FY25 levels, with potential further declines due to US tariffs.
The report highlighted that government capital expenditure has a strong, persistent impact on the economy. Its response to structural shocks shows an immediate positive effect, short-term fluctuations, and eventual stabilization, emphasizing its role as a sustainable driver of growth.
In banking, credit growth slowed to 10% as of July 25, 2025, down from 13.7% last year, while aggregate deposits rose 10.2% versus 10.65% year-on-year. Sectoral credit growth in June 2025 fell across most sectors except SMEs, which saw a robust 21.8% increase compared to 14.2% last year.
The report also warned that US-imposed tariffs may affect revenues and margins in export-oriented sectors such as textiles, gems and jewellery, leather, chemicals, agriculture, and auto components in Q2.
