India’s economy will continue to grow at the quickest rate globally
The Reserve Bank of India’s (RBI) GDP growth projections for 2025–2026 show that India will continue to be the world’s fastest growing major economy notwithstanding global concerns.
In an attempt to reduce the risks associated with the external sector, India has made considerable efforts to diversify and boost its exports.
The Central Bank stated in its monthly Bulletin that “the country is currently engaged in trade negotiations with 14 countries or groups, representing nearly 50 nations, including the European Union, Gulf Cooperation Council countries, and the United States.”
The resiliency of the Indian economy, propelled by home reasons amid a difficult foreign environment, was highlighted in the first advance forecasts of real GDP growth for 2025–2026.
December’s high-frequency indicators point to sustained growth impulse buoyancy and positive demand conditions.
Although headline CPI inflation increased slightly in December, it was still below the lower tolerance level.
According to the RBI study, “the flow of financial resources to the commercial sector has increased over the past year, with both non-bank and bank sources contributing to the credit pick-up.”
India concluded trade talks with Oman and New Zealand in December. Major economic reforms were also implemented in 2025, including as the deregulation of the banking sector, the enactment of labor regulations for labor market reforms, and the rationalization of tax structures, all of which are anticipated to improve growth prospects.
The Reserve Bank’s “Report on Trend and Progress of Banking in India 2024-25” highlighted the banking system’s robust profitability, enhanced asset quality, and adequate capital buffers.
The results of the most recent “Financial Stability Report,” which was published in December 2025, confirmed that banks and non-banking financial firms are resilient enough to sustain losses in unfavorable circumstances and keep capital buffers well beyond the legal minimum.
The RBI stated, “Going forward, the policy focus on striking a balance between innovation and stability, consumer protection, and a prudent approach to regulation and supervision should help improve productivity and support long-term economic growth.“