EY Ups India’s FY26 GDP Forecast to 6.7%, 4 Points

EY Lifts India’s FY26 GDP Forecast to 6.7% on GST 2.0 Boost

1. Growth Forecast Upgrade

1. EY revises India’s FY26 GDP growth to 6.7% (earlier 6.5%).
2. Growth supported by:
   • Monetary easing
   • Demand push from GST 2.0 reforms
   • Domestic consumption resilience

2. GST 2.0: Demand & Price Impact

1. New tax slabs: 5% and 18% (+ special 40% rate).
2. Eliminated 12% and 28% slabs → lower effective prices.
3. Impact by sector:
   • Textiles, electronics, autos, healthcare, food → Cheaper.
   • Fertilizers, agri-machinery, renewables → Lower input costs.
4. Expected outcome:
   • Higher disposable incomes
   • Boost to consumption demand
   • Offsetting short-term revenue dip

3. Trade Diversification Push

1. Current trade reliance: US & China heavy.
2. Risks: Tariffs + supply chain disruptions.
3. Diversification strategy: Shift focus to BRICS+ economies.
4. Trade target: USD 500 bn Indo-US trade by 2030.
   • Exports (services): IT, AI-driven technologies.
   • Imports: Crude, natural gas, defence goods.

4. Policy & Investment Drivers

1. Technology investments critical for export competitiveness.
2. Targeted policies needed for sustaining reforms.
3. Growth outlook resilient due to:
   • Domestic demand base
   • Accommodative monetary stance
   • Global trade realignment opportunities

Key Takeaways

• India’s FY26 growth upgraded to 6.7% despite global slowdown.
• GST 2.0 = Lower taxes → Higher consumption → Stronger GDP base.
• Trade diversification & tech-driven exports are critical for long-term gains.

Disclaimer

This article has been prepared for informational purposes only by The Profit India. It should not be considered as investment, financial, or policy advice. Readers are encouraged to consult professionals before making economic or investment decisions.