S&P Cuts India’s FY26 GDP Growth Estimate to 6.3%
Why in the news
S&P Global Ratings trimmed India’s growth outlook, blaming unpredictable US trade policy.
Key facts
- FY26: 6.3% (was 6.5%). FY27: cut by 30 basis points to 6.5%.
- Risks: higher US tariffs, likely retaliation by partners, market turbulence.
- FPIs sold record amounts of Indian government bonds as the yield gap with US bonds narrowed and global risk aversion grew.
Implications
- Fiscal and monetary assumptions for FY26-FY27 may change.
- Outflows signal weaker sentiment if yield gaps keep shrinking.
- India remains vulnerable to global shocks despite domestic momentum.
Exam angle
- Agency: S&P Global Ratings; 100 basis points equal 1 percentage point.