Current Affairs - Economy

The Asian Development Bank has revised India’s FY25-26 growth outlook upward to 7.2%, reflecting confidence in the country’s strong economic performance during the July–September period and improved prospects for the full fiscal year. This upgraded estimate highlights India’s role as a major contributor to Asia-Pacific’s growth, which has also been raised to 5.1%. The positive adjustment underscores the momentum driven by robust domestic demand, improved investment climate, and ongoing structural reforms. While the projection for FY26-27 remains stable at 6.5%, the current upward revision indicates sustained economic resilience and a favourable medium-term growth trajectory.

The Monetary Policy Committee reduced the repo rate by 25 basis points, bringing it down to 5.25%. This rate cut comes at a time when inflation has eased significantly to 2.2% and GDP growth in Q2 has reached a robust 8%, creating a favourable economic environment often described as a “goldilocks” phase. With retail inflation remaining below 4% for several months, the RBI aims to support economic activity while ensuring price stability. Additionally, planned liquidity measures such as ₹1 lakh crore OMO purchases and a $5 billion USD/INR swap are expected to maintain adequate liquidity in the financial system.

Fitch Ratings has upgraded India’s GDP growth forecast for FY26 to 7.4%, reflecting strong consumer demand, rising confidence, and the positive impact of GST reforms. This revision follows India’s impressive 8.2% growth in the second quarter of FY26, which marked the fastest expansion in six quarters. The updated forecast indicates a more robust economic outlook driven primarily by private consumption. Fitch also noted a narrowing gap between nominal and real GDP due to stable inflation levels, making the growth more sustainable. While momentum may moderate later due to base effects, the 7.4% projection underscores India’s strong economic fundamentals.

IFFCO-TOKIO General Insurance Company is a long-standing joint venture created in 2000, where the Indian Farmers Fertilizer Cooperative (IFFCO) holds a majority stake of 51%, partnered with Japan’s Tokio Marine Group, which owns the remaining 49%. The organization has focused on making insurance affordable and accessible since its inception. On its 25th anniversary, it expanded this mission by collaborating with cooperatives to distribute micro insurance products to underserved communities. This approach supports IRDAI’s ‘Insurance for All by 2047’ goal by improving insurance penetration in rural and semi-urban regions, leveraging cooperative networks to increase awareness, coverage, and financial protection for low-income groups.

The FDI inflow during the first half of FY 2025-26 reached $50.36 billion, marking a 16% increase over the $43.37 billion received in the same period the previous year. This growth represents the highest-ever FDI recorded for the first half of any fiscal year in India. Alongside this rise, the government also pointed to stronger repatriation patterns, an increase in outward direct investment, and the expansion of India’s network of free trade and preferential trade agreements. Major pacts such as the EFTA agreement, which promises large investment commitments and job creation, further reflect the country’s expanding global economic engagement.