Despite the ongoing economic uncertainties globally, there is good news for the Indian economy. According to the latest report by CareEdge Ratings, India’s economic growth rate is expected to be around 7 percent in the financial year 2026-27. The agency believes that the pace of growth will continue due to the strong domestic base of the country’s economy, low inflation and favorable policies.
It has been said in the report that inflation is currently under control, interest rates are being softened and the purchasing power of consumers has increased due to steps like reduction in tax burden. This has a direct impact on demand and investment, which accelerates economic growth. According to CareEdge, even though India’s merchandise exports remain under pressure due to tariff uncertainties, services sector exports remain strong and this is keeping the country’s external economic situation balanced.
The country’s GDP will remain this much
According to the first advance estimate of the government, India’s GDP growth in the current financial year 2025-26 may be 7.4 percent. Whereas RBI has estimated it at 7.3 percent. CareEdge says that steps like relief in income tax, rationalization of GST rates, reduction in inflation and cut in interest rates by RBI have strengthened the growth.
CareEdge Chief Rating Officer Sachin Gupta said that India’s current macro economic picture looks quite encouraging. The banking sector is in its strongest position in the last decade as NPAs have declined and corporate credit quality has improved. Along with this, fiscal deficit is decreasing and the government is emphasizing on structural reforms.
However, some challenges have also been pointed out in the report. The weakness of the rupee is a matter of concern. In the last one year, the rupee has fallen by more than 15 percent against the pound and euro. Foreign investment has also declined. Foreign portfolio investors withdrew about $18 billion in 2025, while foreign direct investment (FDI) has also seen a sharp decline in the last few years.
CareEdge believes that to become a developed India, India will not only have to remain strong on the domestic front, but will also have to focus on attracting foreign investment, R&D, innovation, employment generation and strengthening the agriculture sector.