S&P Global cuts India’s growth projection to 6.3% for current fiscal

S&P Global Ratings cut India’s growth projections by 0.2% to 6.3% for the current fiscal year citing uncertainty over the US tariff policy and downside risks from its spillover to the economy.

It projected India’s GDP growth to be 6.3% in 2025-26 and 6.5% in 2026-27 fiscal year.

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It said that among Asia-Pacific’s major economies, China is expected to see its growth drop from 0.7% in 2025 to 3.5% and in 2026 to 3%.

In a report titled “Global Macro Update: Seismic Shift In US Trade Policy Will Slow World Growth”, S&P Global Ratings said “we reiterate that there are no winners in a scenario of escalating protectionist policies.”

With regard to exchange rate fluctuations, S&P projected INR/USD exchange rate to be 88 by 2025-end from 86.64 in 2024.

The INR/USD pair is witnessing significant fluctuations since the US tariff announcement and the rupee is currently hovering at 84-level against the greenback.

According to S&P, the US economy is expected to grow 1.5% this year and 1.7% in the next.

Notably, in March, S&P had lowered the FY’26 GDP growth forecast to 6.5%, from 6.7%.

Highlighting further on the US tariff policy, it said this will fall into three buckets — China will be an individual case, reflecting the ongoing geopolitical rivalry, including long-standing tensions around the bilateral trade imbalance and “unfair competition.”

Notably, recently, Deloitte has also projected India’s GDP to grow between 6.3 to 6.5% in FY2025, driven by a resilient domestic market and targeted policy support.

However, the outlook for FY2026 is expected to be slightly softer than earlier estimates, as global trade uncertainties cloud economic visibility.