India’s recent and upcoming trade agreements are expected to provide support to exports over the medium term. RBI Governor Sanjay Malhotra said on Friday that the recently concluded India-EU free trade agreement and the proposed India-US trade deal, along with other agreements, will aid export performance.
Speaking during the RBI MPC meeting, which kept the key policy rate unchanged, Malhotra said services exports are likely to remain resilient. At the same time, he cautioned that “the spillovers emanating from geopolitical tensions, volatility in international financial markets and shifting trade patterns pose risks to the outlook.”
On the demand side, private consumption momentum is expected to sustain in 2026-27. Rural demand remains stable, supported by improving agricultural activity and better rural labour market conditions.
“Recovery in urban consumption should further strengthen with continued support from GST rationalisation and monetary easing. High-capacity utilisation, accelerating bank credit, conducive financial conditions, and government’s continued emphasis on infrastructure should give an impetus to investment activity,” Malhotra said.
He added that several measures announced in the Union Budget are also expected to be supportive of growth.
Looking ahead, overall economic activity is projected to remain strong in 2026-27. Agricultural activity is set to benefit from healthy reservoir levels, robust rabi sowing, and improved crop vegetation conditions.
“Improving corporate sector performance6 and sustained momentum in informal sector should boost manufacturing activity. Construction sector growth is expected to remain firm. Services sector should continue to be resilient, with strengthening domestic demand. Early results from IT firms suggest an improvement in business activity,” Malhotra said.
The Indian economy continues on a steady upward path, with real GDP growth projected at 7.4% in 2025-26, higher than the previous year. Despite global headwinds, private consumption and fixed investment supported growth.
“Net external demand, however, remained a drag, with imports outpacing exports. On the supply side, growth in real GVA, on the back of a strong contribution from the services sector and revival in manufacturing activity, is estimated at 7.3% in 2025-26,” he noted.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
