S&P Global Ratings has projected India’s economy to grow at 6.5% in the current fiscal year, followed by 6.7% in the next, reflecting confidence in India’s strong domestic demand and investment momentum. However, S&P also flagged significant headwinds: U.S. tariffs on Indian exports are weighing on key sectors, particularly manufacturing and goods destined for global markets. This could hinder export-led growth even as internal consumption remains robust.

Economists see this outlook as a mixed signal the growth potential remains high, but external trade risks demand close monitoring. Policymakers may need to focus on export competitiveness, trade diversification, and sustaining investment-led growth to balance these dynamics.