India GDP Growth Forecast: Anant Goenka, the new president of industry body FICCI, said on Tuesday that India is in a “good position” for sustainable growth. On the basis of strong macro fundamentals and ongoing reforms, GDP is expected to grow at a rate of more than seven percent in the current financial year 2025-26.

Goenka said that in the coming year, the body’s focus will be on increasing the share of manufacturing sector in Gross Domestic Product (GDP) from the current 15-17 percent to 20-25 percent over time.

Prioritization

The industry body has set priorities to ensure this, such as increasing expenditure on R&D from 0.7 per cent of GDP to one per cent. Also strengthening industry-academia partnerships, supporting government efforts to promote ease of doing business, trade and supply chain security and enhancing manufacturing excellence.

Which includes focusing on quality, including women in the workforce and adopting sustainable practices. “I think GDP will grow at more than seven percent during 2025-26,” he said in an interview with PTI. “After all the changes in income tax bracket, Goods and Services Tax (GST) and changes in the Labor Code, I feel India’s macroeconomic position looks very strong with the reforms.”

FICCI President’s statement

Goenka, President of ‘Federation of Indian Chambers of Commerce and Industry’ (FICCI) said that the challenges on the trade front will also be resolved in a “very short” time. “So we are in a good position,” he said.

Private investment capital expenditure is also an aspect which is ready for change.” The FICCI chief said that, as capacity utilization increases, new investments by the industry will also increase. India’s economy grew at a faster-than-expected 8.2 percent rate in July-September, the fastest pace in six quarters.

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Moody’s Keeps India’s Baa3 Rating Unchanged: This news is going to be relaxed for India, facing a constant rupee and high American tariff on the domestic front. Moody’s Ratings retained India’s long -term local and foreign exchange issuing ratings with a stable outlook on the Baa3. The rating agency has also kept the local currency Senior UNSECURED rating unchanged at the same level. According to Moodyes, stable outlook reflects India’s strong economic growth possibilities and improving financial indicators, although some loans related challenges remain.

BAA3 rating intact

The US rating agency says that stable outlook incorporates India’s gradually improving financial standards and strong growth compared to colleague countries. However, in uncertain global macroeconomic conditions, revenue reduction measures and financial customization can prevent the progression of debt and further challenge already weak debt capacity.

The report said that these strength provides flexibility towards adverse external trends, especially when high American charges and other international policy steps obstruct India’s ability to attract manufacturing investment. However, the agency also said that India’s debt capacity is balanced with the long -term weaknesses of the fiscal side. Good GDP growth and gradual fiscal strength will be able to reduce the high debt burden of the government.

Capacity to take loan will remain

Recent fiscal measures to promote private consumption have weakened the revenue base of the government. The agency also clarified that India’s long-term local-currency (LC) bond boundary A2 and long-term foreign-currency (FC) bond boundary remains unchanged on A3. It is worth noting that earlier on August 14, S&P Global Ratings had increased India’s government credibility from ‘BBB-‘ to ‘BBB’.

What is Baa3?

The BAA3, Moody’s rating is the lowest investment grade rating on the scale. This means that India’s bonds and debt instruments are still considered to be investable, that is, they are not considered very risky, but they are at the lower level of the category. If the rating goes below the BAA3, it will be considered a “junk” status, which will increase the cost of borrowing for the government and companies. “Stable” outlook means that Moodyes does not see the possibility of change in this rating in the near future, neither upwards nor downwards.

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Unempolyment rate falls: India has been imposed on India by US President Donald Trump, which includes 25 percent base tariff, which is currently effective. Apart from this, 25 percent additional tariffs have also been imposed due to purchasing oil from Russia, which will be applicable from August 27. Amidst all this, it is a relief for India that the unemployment rate of the country has come down to 5.2 percent in July, compared to 5.6 percent in June.

Unemployment and inflation rate
The unemployment rate of youth above 15 years in rural areas came down to 4.4 percent in July, which was 4.9 percent in June. The seasonal needs related to agricultural works are being considered as an important reason behind this. However, the unemployment rate in urban areas rose slightly to 7.2 percent in July, compared to 7.1 percent in June. The unemployment rate in urban youth (age group 15 to 29) also increased to 19 percent in July, which was 18.8 percent in June.

The unemployment rate of 15 years and above was 5.4 percent in the April-June quarter. At the same time, the Labor Force Participation Rate increased to 54.9 percent in July, which was 54.2 percent in June.

GST Reform and Indian Economy
The announcement of the GST reform by the Government of India raises hope of increasing production on the domestic front and creating opportunities for new jobs. This decision has been taken at a time when the US has announced a heavy tariff on Indian goods.

On the other hand, last week, S&P after about 18 years to India’s long -term sovereign credit rating BBB-upgraded BBB Is done. The US rating agency has cited strong economic growth and better monetary policy behind this. India’s GDP growth was 8.8 percent between 2022 and 2024, the highest in the Asian sector. In the coming three years, it is expected to grow at the rate of 6.8 percent.

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