India To Be Asia's fastest growing economy in 2026, Says Fitch Ratings

New Delhi: India's economy is on track to become Asia's fastest-growing major economy in 2026, according to a new report by global credit ratings agency Fitch Ratings. 

Fitch Ratings expects the country’s economy to expand by around 6.4 per cent this year, a rate higher than key regional peers like the Philippines, Indonesia and Malaysia. 

What does the report say?

According to the Fitch Ratings reports, "Economic growth in India, Indonesia and the Philippines is likely to be least affected by trade pattern changes in the near term, as manufacturing exports are low in their relatively closed economies."

"India is expanding its trade relationship with countries outside of the US through a number of trade deals, most recently with the EU, to offset risks from US tariffs," Fitch Ratings report say.

What about policy rate?

Fitch Ratings said that on the policy front, RBI would keep rates on hold for the near term.

“We expect the Reserve Bank of India to keep its policy rate unchanged at 5.25 percent, following the cut last December,” the rating firm said.

According to the Fitch Ratings reports, "India has enhanced fiscal transparency, including more spending items in the budget, and revenues are buoyant on higher growth and introduction of goods and services tax, increasing the likelihood that government debt can follow a modest downward trend in the medium term."

As per the rating firm, the debt to GDP is expected to stay high.

Dream of $7.3 trillion by 2030?

With GDP valued at $4.18 trillion, India has surpassed Japan to become the world's fourth-largest economy and is poised to displace Germany from the third rank in the next 2.5 to 3 years with a projected GDP of $7.3 trillion by 2030, according to reports

The growth momentum further surprised on the upside, with GDP expanding to a six-quarter high in Q2 of 2025-26, reflecting India's resilience amid persistent global trade uncertainties.

India's real GDP grew 8.2 per cent in Q2 FY2025-26, up from 7.8 per cent in the previous quarter and 7.4 per cent in Q4 of 2024-25, led by resilient domestic demand amidst global trade and policy uncertainties. Real gross value added (GVA) expanded by 8.1 per cent, catalysed by buoyant industrial and services sectors.