NEW DELHI, Oct. 3 -- India's economy is projected to expand near the upper end of the government's 6.3-6.8% forecast for the current fiscal year, supported by indirect tax reforms, according to finance ministry estimates.

This follows a surprise 7.8% growth in Q1FY26, a five-quarter high that defied expectations of a slowdown, after FY25's 6.5% expansion, the weakest pace in four years, and a heady 9.2% in FY24.

However, global and domestic headwinds, including steep US tariffs that threaten India's export competitiveness and geopolitical flashpoints from West Asia to Ukraine that could drive up energy costs, pose risks to the growth outlook.

Mint breaks down the reasons behind the government's optimism, even as challenges mount.

Glob...