Archive · 3 Jun 2025
India's Economic Outlook: Growth Projections for 2025 and Beyond
Experts predict India's economy will keep growing strongly, helped by domestic spending and investments.
The OECD forecasts a 6.3% growth in 2025 and 6.4% in 2026, while Motilal Oswal expects significant earnings growth.
However, global issues like trade tensions and slowing global growth present risks.
Indian banks are expected to stay stable, with the nonperforming loan rate remaining steady.
Some sectors, like financials, are expected to do well, while the performance of unsecured retail loans might be weaker.
OECD projects India's economy to grow 6.3% in 2025 and 6.4% in 2026.
Motilal Oswal expects 12-14% earnings growth for the fiscal year 2025-26.
Moody's expects Indian banks to maintain healthy asset quality.
Global slowdown is expected, with potential risks to export-heavy sectors.
Unsecured retail loans are noted as more vulnerable than secured ones.
- Who
- OECD, Motilal Oswal, and Moody's Ratings.
- What
- India's economic growth projections and outlook.
- When
- 2025 and 2026.
- Where
- India and the global economy.
- Why
- To assess India's economic performance and banking sector.
Opportunities
Risks
Global Trade
Opportunities
Open trade benefits the global economy.
Risks
Trade frictions could negatively impact India's export-heavy sectors.
Unsecured Loans
Opportunities
Unsecured loans are a growing part of the market.
Risks
Unsecured retail loans are more vulnerable than secured loans in the short to medium term.
Sector Performance
Opportunities
The financial sector will continue to perform well
Risks
Commodities, impacted by global factors, remain a key risk.
- India's GDP Growth 2025 (OECD)
- 6.3%
- India's GDP Growth 2026 (OECD)
- 6.4%
- Systemwide NPL ratio (Next 12 months)
- 2-3%
- Motilal Oswal's FY26 Earnings Growth Expectation
- 12-14%
- Systemwide NPL ratio (End of December 2024)
- 2.5%
Sources
Profitability to drive next leg of bank re-rating: Morgan Stanley analyst
Motilal Oswal's Gautam Duggad expects 12-14% earnings growth in FY26
India's domestic economic conditions will continue to be supportive for growth: Moody’s Rating
