Fitch Ratings cut India’s GDP growth estimate by 10 basis points to 6.4 per cent for the current fiscal.

A day before, Moody’s Ratings had also cut down projections, saying the Indian economy could grow in a range of 5.5 to 6.5 per cent during the calendar year 2025, lower than its February projection of 6.6 per cent.

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However, Fitch has retained the projections for the next financial year, on concerns over a ‘severe’ escalation in the global trade war.

“It is hard to predict US trade policy with any confidence. Massive policy uncertainty is hurting business investment prospects, equity price falls are reducing household wealth, and US exporters will be hit by retaliation,” Fitch said in its special update to quarterly Global Economic Outlook (GEO).

Fitch also cut the world growth projections in 2025 by 0.4 percentage points and China and US growth by 0.5 percentage points from its March GEO.

Fitch cut GDP growth estimates for both the 2024-25 fiscal and the current 2025-26 fiscal by 10 basis points to 6.2 per cent and 6.4 per cent , respectively. For the 2026-27 fiscal year, growth has been retained at 6.3 per cent.

The forecasts for world growth have been sharply lowered in response to the recent severe escalation in the global trade war.

The GDP growth rate of the United States is expected to remain positive at 1.2 per cent for 2025. China’s growth is expected to fall below 4 per cent both this year and next, while growth in the eurozone will remain stuck well below 1 per cent, as per Fitch projections.

It said the US ‘Liberation Day’ tariff hikes were far worse than expected.