India’s economy is likely to lose some momentum through the rest of FY26 as the government tightens expenditure to meet its fiscal deficit target and global trade conditions soften, according to Leif Eskesen, Chief Economist at CLSA. The brokerage expects full-year GDP growth to come in at 6.9%, just shy of the 7% mark.

Eskesen said the modest slowdown will largely stem from two factors. “One is that the government has to rein in spending to some extent to meet the deficit target. We think there will be some slowdown on that side, maybe in government-led infrastructure-type investments,” he noted.

The second drag will emerge from external conditions. India continues to feel the lagged impact of the higher tariffs imposed by the United States, even as the outlook for global trade remains

See Full Page