The Reserve Bank of India on Wednesday projected India’s GDP growth for 2025-26 at 6.5% amid the trade jitters due to the US tariffs.

Governor Sanjay Malhotra announced that the real GDP growth for 2025-26 is now projected at 6.5%, with Q1 at 6.5%; Q2 at 6.7%; Q3 at 6.6%; and Q4 at 6.3%.

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The GDP projection is on the back of sustained demand from rural areas and revival in urban consumption amid changing global economic outlook after the recent trade tariff related measures exacerbated uncertainties clouding the economic outlook across regions.

“Going forward, sustained demand from rural areas, an anticipated revival in urban consumption, expected recovery of fixed capital formation supported by increased government capital expenditure, higher capacity utilisation, and healthy balance sheets of corporates and banks are expected to support growth,” RBI Governor Sanjay Malhotra said.

He said the merchandise exports would be weighed down by the evolving global economic landscape which appears to be uncertain at the current juncture, while services exports are expected to sustain the resilience. On the supply side, while agricultural prospects appear bright, industrial activity continues to recover, and the services sector is expected to be resilient.

On the supply side, real gross value added (GVA) expanded by 6.4%, y-o-y, driven by agriculture and services sectors, he said.

The real GDP growth for Q3:2024-25 was placed at 6.2% y-o-y, driven by robust private and government consumption expenditure.

Notably, the second advance estimates (SAE) released by the National Statistical Office (NSO) estimated real GDP growth at 6.5% y-o-y in 2024-25 on the back of robust growth in private final consumption expenditure.

Flagging the global headwinds due to the Trump tariff, Governor Malhotra said, “The recent trade tariff related measures have exacerbated uncertainties clouding the economic outlook across regions, posing new headwinds for global growth and inflation.”