India growth outlook 2026: Shah backs budget continuity

India’s growth story stays in focus

India is continuing to stand out as a key growth market amid heightened global uncertainty, according to Mahindra Group Managing Director and CEO Anish Shah. Speaking to Moneycontrol at the World Economic Forum 2026 in Davos, Shah said perception on India remains “continuously very positive” because the country is a bright spot from a growth standpoint. He added that India is likely to remain a major growth destination for companies worldwide.

In separate comments to ET Now, Shah linked the positive outlook to the policy direction reflected in the Union Budget and broader reforms over the last few years. He said the budget reinforces India’s economic momentum at a time when the global environment is volatile.

What Shah said about the Union Budget and reforms

Shah told ET Now that, from a medium to long-term perspective, the budget is “an excellent budget” that supports the growth momentum India has maintained despite global turbulence. He highlighted that reforms undertaken in recent years have laid the groundwork for resilience, and that the latest budget adds further building blocks for sustainable expansion.

At Davos, Shah also argued for continuity in policy direction, pointing to recent Union Budgets that have emphasised capital expenditure, infrastructure creation, and fiscal discipline. In his view, maintaining this approach would support industrial expansion and private investment.

Domestic demand supports key industrial segments

Shah said the outlook remains positive across automotive, farm equipment, and other industrial segments, supported by steady domestic consumption. His comments come at a time when India’s growth narrative is being weighed against global headwinds, including higher US tariffs and volatile capital outflows.

Even with these pressures, the article notes India posted 8% growth in the first half of the fiscal, supported by robust private consumption and investment, aided by easing inflation and favourable rural conditions.

Growth projections: Deloitte, IMF, and the official view

The provided data includes multiple growth estimates and scenarios for fiscal 2025-26 and beyond. Deloitte’s optimistic scenario projects growth between 7.5% and 7.8% in fiscal 2025-26, and between 6.6% and 6.9% in fiscal 2026-27. The narrative also points to expectations of a stronger full-year outcome as third-quarter numbers are likely to remain strong due to festive spending.

Separately, Chief Economic Advisor (CEA) V Anantha Nageswaran said India’s growth is expected to be “north of six and a half” and that he is “more comfortable saying, even north of 6.8 per cent,” while cautioning it was too early to revise estimates beyond 6.8%. The IMF projection referenced in the text puts India’s fiscal 2025-26 growth at around 6.6%, with a strong first quarter where real GDP grew by 7.8%.

How GST changes are feeding into sentiment

At CNBC-TV18’s Global Leadership Summit 2025, Shah said the recent GST rate reduction has boosted customer sentiment and consumption. He linked this change in sentiment to the likelihood of increased private sector investments to expand production capacities.

In the same discussion, Shah pointed to reforms, physical and digital infrastructure, and continued commitment to reforms as key “foundation elements” that can support a broader investment cycle.

Capacity utilisation and the investment cycle narrative

Shah also said many industries are operating above 80% capacity utilisation, which would likely trigger a new investment cycle. In that context, he described the Indian economy as “firing on all cylinders” and said it has the potential to grow by 8-10% annually over the next two decades.

The text also includes a separate market participant view that India could continue to grow at 5% to 7% for years, supported by infrastructure creation, improving ease of doing business, available capital, and talent retention, while adding that reforms would be needed to move to double-digit growth.

RBI Governor’s comments on medium-term growth and rates

The article references RBI Governor Shaktikanta Das saying India can sustain economic growth of up to 8% over the medium term. It also notes Das did not indicate the RBI was leaning towards a rate cut in October, saying he could not say that when asked.

Das projected growth to hover around 7.5% in the coming years, with potential upside, even as growth dipped to 6.7% in one quarter from 7.8% in the prior three months.

Mahindra’s diversification point and quarterly performance indicators

Shah also stressed that Mahindra’s business is not solely dependent on automobiles. He said autos contribute 28% to profits, and SUVs are less than half of that. He also cited profit growth in the July-September quarter across key areas: farm business (54%), Mahindra Finance (45%), and Tech Mahindra (35%).

In another public forum referenced, Shah reiterated optimism on India’s economy and cited business expectations including 20% SUV growth and 15% growth in Q4 farm business.

Key numbers at a glance

Mahindra-specific datapoints mentioned

Why the continuity message matters for investors

Shah’s emphasis on continuity ties together several threads in the provided material: steady domestic consumption, capex-led policy focus, and the role of reforms and GST changes in shaping sentiment. Growth projections vary across institutions, but the common theme in the text is that India is still expected to outperform many peers, even with global uncertainty and capital flow volatility.

For investors tracking Indian cyclicals and capex-linked sectors, the narrative places infrastructure creation, fiscal discipline, and private investment appetite at the centre of the medium-term story. At the same time, official and multilateral projections in the text show a wide range of growth outcomes, with some caution about revising estimates too early.

Conclusion

Anish Shah’s comments at Davos and on Indian television frame India as a durable growth market supported by reforms, budget continuity, and improving sentiment after GST changes. The next set of high-frequency growth prints and policy signals on capex and fiscal discipline will remain key reference points for how this optimism translates into private investment decisions.