The newest growth deck puts India at 6.5 percent for FY26, nudging the outlook higher on resilient domestic demand and steady public capex. The same note trims FY27 to around the mid sixes, and the footnote matters. If global tariff walls rise through 2026, export heavy pockets like engineering goods, textiles and certain chemicals could feel a speed breaker just when domestic momentum invites fresh private capex.
What to track next. Core inflation has eased into a comfortable band which lets monetary conditions loosen gradually if needed, but food spikes still swing sentiment. Credit flows to MSMEs are improving through co-lending and guarantee schemes, yet working capital remains tight in low-margin exporters who face both raw material volatility and possible duties in destination markets. If tariff headlines turn into actual schedules, expect supply chains to re-route via friendlier hubs and for India’s export basket to lean harder on services and niche manufacturing with pricing power.
For portfolios the base case is unchanged. Domestic cyclicals still benefit from consumption and capex, rural demand should repair as food inflation normalises, and select exporters with hedged markets can ride through a bumpy FY27. Keep an eye on the current account mix. A services surplus can absorb some goods-trade friction, but currency stability will depend on oil and portfolio flows.
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