NEW DELHI: The Indian economy is expected to grow at 6.5 per cent in the current financial year, despite geopolitical tensions and trade policy uncertainties, Economic Advisory Council to the Prime Minister (EAC-PM) chairman S Mahendra Dev said on Tuesday.Dev further said that domestic growth will be driven by low inflation, resulting from good monsoon and benign interest rate regime, triggered by three back-to-back rate cuts by RBI. “There are significant global headwinds like the twin shocks of geopolitical tensions and trade policy uncertainties. However, the Indian economy is resilient and continues to be the fastest growing country among large economies,” the economist said.According to Dev, high-frequency indicators for the first two months of 2025-26 indicate resilient performance of the domestic economy. “A 6.5 per cent of GDP growth for FY26 is feasible despite global uncertainties. India’s medium-term growth prospects seem to be robust with sound fiscal management.” Dev also emphasised that rising government capital expenditure will have positive impact on growth, with a healthy expansion in private consumption. IMF and the World Bank have slashed India’s growth projections for 2025-26 to 6.2 per cent and 6.3 per cent respectively, citing uncertain global environment and trade tensions. The Indian economy is estimated to have grown at 6.5 per cent in the previous financial year.
