India's 2026 Economic Outlook: Growth Surges, Policies Shape Future

• India enters 2026 with strong industrial output (6.7%) and manufacturing growth (8%) in November, but sustainability of consumption demand and capital goods investment are key.
• Upcoming Union Budget 2026-27 and RBI monetary policy will be crucial in shaping economic expectations for the year.
• Fiscal policy faces challenges due to decelerated nominal GDP growth impacting tax revenues and spending capacity, despite strong real GDP growth.
• RBI is expected to maintain an accommodative stance, with low odds of rate hikes and ongoing liquidity infusion to support capex.
• Corporate earnings are projected to rise, and foreign investor interest in Indian markets is anticipated to rebound, signaling a positive outlook for equities.

Why It Matters: India's 2026 economy shows strong growth, but fiscal-monetary balance and investor sentiment are key.