NEW DELHI: India’s chief economic adviser, V. Anantha Nageswaran, on Friday said he is now more comfortable projecting a number north of 6.8% for India’s GDP growth in FY26, signalling renewed optimism about the economy’s momentum amid stronger private investment and improving foreign inflows.
Speaking at the CNBC-TV18 Global Leadership Summit 2025, Nageswaran recalled that his initial projection had been in the 6.3-6.8% range.
“Back in August, we were all concerned about whether we would even go towards the lower end of the 6%–7% range,” he said. “Let’s say, it will definitely be 6.5%, and I am more comfortable saying even north of 6.8%.”
Nageswaran noted that he would wait for the second-quarter numbers before finalizing a projection, while acknowledging “an upward bias” to the current estimate. “If by some chance, as we are still hoping, there is a resolution on the trade front, then the upward bias will become a mainstream forecast.”
India’s economy has been expanding faster than expected, with GDP growth at 7.8% in the April-June quarter, the fastest pace in five quarters, even as rising US tariffs on Indian imports have clouded the trade outlook.
On ongoing India-US tariff negotiations, Nageswaran expressed hope for progress.
Manufacturing push
The chief economic adviser emphasized that India’s drive for domestic manufacturing must go hand in hand with integration into global value chains.
“There has to be a complementary goal of plugging ourselves into the global value chain,” he said. “I don’t think we will succeed only by onshoring everything, but by plugging ourselves more intelligently into the global value system.”
Drawing lessons from the electronics sector, he noted that reforms such as removing inverted duty structures and exempting raw materials from customs duties are key to lowering production costs.
The success of the production-linked incentive (PLI) scheme, he added, should propel India “to move from domestic indigenisation to strategic resilience, and from then on to becoming strategically indispensable.”
Turning to investments, Nageswaran dismissed the notion that private capital expenditure has been weak. “Honestly, I think the one-year data for 2023-24 has influenced us all to think that private capital has been somewhat disappointing. It’s not.”
“There was a post-rebound in 2021-22, 2022-23 was a moderate year, and there was a disappointment in 2023-24. But whatever data we have until now from listed and unlisted companies in the private sector, 2024-25 was a very good year for private capex,” he added.
According to the Ministry of Statistics and Programme Implementation’s Forward-Looking Survey on Private Sector Capex Investment Intentions, released earlier this year, private investments were estimated at ₹6.56 trillion in FY25. In comparison, public capital expenditure reached ₹11.11 trillion in the same period.
FDI revival
Nageswaran noted that during 2025-26, global uncertainties notwithstanding, net FDI numbers looked strong. “With five months of RBI data, we are seeing net FDI meaningfully higher than what it was in the last two years.”
FDI inflows rose to $81.04 billion in FY25, up from $71.28 billion a year earlier.
On fiscal measures taken by the central government, he argued they were designed to strengthen both demand and supply.
“What was done in direct taxes in February and indirect taxes in September, they are not about a demand boost. They are also very much about supply boost,” he said. “The most important indicator is not interest rates; it is demand visibility.”
Addressing potential disruptions from artificial intelligence, he struck a measured note. “There will be more positive and negative anecdotes, and anecdotes will obviously carry much more powerful impact than numbers.”
While new jobs will emerge, the immediate impact will likely be more negative as workers adjust, he added. “Eventually, it will turn out to be net positive for the world.”
“The challenge lies in what the state and private sector do, given India’s size and numbers, in order to create augmenting jobs, supplementing jobs, and non-AI disruptive jobs, and what kind of skilling we give in those areas,” he added.
Looking ahead to the Union Budget, Nageswaran said it was “premature” to comment on the government’s policy thrust. Many initiatives, he noted, including those on PLI schemes, smartphones, and semiconductors, originate from other ministries.
“The finance ministry acts as a compiler,” he said, adding that ongoing work includes income tax simplification bills, customs reforms, and initiatives in public sector banking.