New Delhi, Aug. 30 -- India's economy is projected to expand by 6.5% in FY26, driven by steady domestic momentum, according to a report by Bank of Baroda. However, the lender cautioned that escalating concerns over ongoing tariff negotiations may pose a downside risk to the positive outlook.

This projection aligns with the Reserve Bank of India's (RBI) outlook of 6.5%, which was announced during the latest Monetary Policy Committee (MPC) meeting outcome on August 6, 2025.

The fiscal year began with a strong performance, as India's GDP accelerated to 7.8% in the first quarter of financial year 2025-26, a major jump from 6.5% in the same period last year.

Bank of Baroda added that the upcoming festive season spending and a recovery in ur...