India’s GDP growth forecasts for the next fiscal year were lowered by S&P Global Ratings on Tuesday to 6.5%. The rating agency predicts that the APAC region’s economy would be impacted by the increased US tariffs and resistance to globalization.

According to S&P’s Economic Outlook for Asia-Pacific (APAC), the majority of emerging-market countries should continue to have strong internal demand momentum in spite of these external pressures. “We anticipate that India’s GDP would increase 6.5% in the fiscal year that ends on March 31, 2026. S&P said, “Our forecast is lower than our earlier forecast of 6.7%, but it is the same as the outcome for the previous fiscal year.”

The projection makes the assumption that the next monsoon season would be typical and that commodity prices, particularly those of oil, will remain low. Reduced borrowing costs, tax breaks included in the nation’s budget for the fiscal year ending March 2026, and a cooling of food inflation would all help India’s discretionary spending, according to S&P. Throughout this year, the global credit rating agency anticipates that central banks in the Asia Pacific area will keep lowering benchmark interest rates. We predict that the Reserve Bank of India will lower interest rates by an additional 75–100 basis points throughout the current cycle. In the fiscal year ending March 2026, headline inflation will approach the central bank’s objective of 4% as food inflation and oil prices decline, according to S&P.