Export Slowdown Threatens To Hurt Growth In H2 Without Trade Deal With US, Says ICRA

ENA Economy 2025-12-30 13:15:03 New Delhi, Dec 30 (KNN) Exports slowdown could intensify in the second half (H2) of the current fiscal and weigh on economic growth unless a trade deal with the US is finalized, according to rating firm ICRA. ICRA has pegged India's GDP growth at 7.4% in FY2026 up from 6.5% in FY2025 on the back of better than expected numbers in the first half of the fiscal. It however sees the growth moderating in the second half of the fiscal due to an unfavourable base. ICRA forecasts GDP growth to print below 7% in H2 FY2026 from 8% in H1 FY2026. The rating agency said that unless the Government of Indias capex allocation is enhanced and the tariff-related uncertainties ebb the GDP growth appears set to ease below 7% in the second half. Aditi Nayar, Chief Economist at ICRA said that growth outcomes have panned out better than expectations in 2025 with policy stimulus including income tax relief, GST rate rationalization, 125 bps policy rate cuts and liquidity support driving the economic activities. A sharp dip in inflation eased pressure on household budgets and an above normal monsoon boosted crop output. Nevertheless, concerns on the external front have remained entrenched and are likely to impact growth outcomes in the near term unless a trade deal with the US materializes shortly, she said. As per the rating agency, rural demand is expected to remain robust in the near term amid healthy kharif output, robust rabi sowing and the GST rate rejig. Consumption in urban centres is expected to be supported by repo rate cuts, GST rate rationalization and benign food prices. The service sector prospects for H2 look bright as demand during the festive and wedding periods as well as leisure travel picks up supporting sectors like aviation and hotels, ICRA said. Economic activity remained healthy in the October-December period (Q3) of the current fiscal, aided by a GST rate cut-led surge in demand during the festive season. (KNN Bureau) 44590 https://knnindia.co.in/news/newsdetails/economy/export-slowdown-threatens-to-hurt-growth-in-h2-without-trade-deal-with-us-says-icra 2025-12-30 13:15:03 knnindia.co.in Export Slowdown Threatens To Hurt Growth In H2 Without Trade Deal With US, Says ICRA