India is poised to maintain its position as one of the world’s best-performing economies, with its GDP expected to grow at an average annual rate of 6.8% over the next three years, according to a report released by S&P Global Ratings on August 14, 2025.
The global ratings agency cited robust domestic demand, strong infrastructure investment, and improved fiscal discipline as key drivers of this sustained growth. India’s real GDP growth averaged 8.8% between FY 2022 and FY 2024, the highest in the Asia-Pacific region, and is forecasted to reach 6.5% in FY 2026.
S&P emphasized that India’s economic expansion is positively impacting its credit metrics. The government’s commitment to fiscal consolidation and improved quality of public spending—especially in infrastructure—are expected to support long-term growth. Capital expenditure by the Union government is projected to rise to ₹11.2 trillion (3.1% of GDP) by FY 2026, up from 2% a decade ago. Including state-level investments, total public infrastructure spending is estimated at 5.5% of GDP.
Monetary policy reforms, particularly the shift to inflation targeting, have helped anchor inflation expectations. Despite global volatility, India’s consumer price inflation has averaged 5.5% over the past three years and remains within the Reserve Bank of India’s target range of 2–6%.
S&P also noted that potential risks from U.S. tariffs are likely to be manageable due to India’s relatively low reliance on external trade. With nearly 60% of its growth driven by domestic consumption, the economy is expected to remain resilient even amid global headwinds.
