Ongoing trade negotiations between India and the United States are expected to conclude during the year, according to the Economic Survey for FY26 tabled in Parliament on Thursday, January 29. The survey noted that a potential conclusion of these talks could help reduce uncertainty on the external front at a time when global economic conditions remain challenging.
The Economic Survey stated that for India, current global conditions translate into external uncertainties rather than immediate macroeconomic stress. It pointed out that slower growth in key trading partners, tariff-induced disruptions to global trade, and volatility in capital flows could intermittently weigh on exports and investor sentiment.
Despite these challenges, the survey emphasised that the risks remain manageable, reinforcing the importance of maintaining adequate economic buffers and policy credibility. It highlighted that India’s domestic economy continues to remain on a stable footing, providing resilience against external shocks.
The survey noted that inflation has moderated to historically low levels, although some firming may occur going forward. It also observed that balance sheets across households, firms, and banks have improved, while sustained public investment continues to support economic activity.
Consumption demand remains resilient, and private investment intentions are showing signs of improvement, the survey said. It added that the cumulative impact of policy reforms over recent years appears to have lifted India’s medium-term growth potential closer to 7%.
The implicit H2 estimate for exports of goods and services suggests that trade activity is likely to remain resilient. At the same time, trade data for Q3 of FY26 indicate some softening in export growth, with core16 goods and services exports expanding by 3.5 per cent and 1.4 per cent, respectively, on a year-over-year basis on account of high base of last year. Looking ahead, export momentum is expected to strengthen, supported by advancing bilateral trade negotiations with the United States, trade agreements with other major economies, and continued efforts to diversify export markets.
Looking ahead, the Economic Survey projected real GDP growth in FY27 in the range of 6.8% to 7.2%, describing the outlook as one of steady growth amid global uncertainty, requiring caution but not pessimism.
The Economic Survey was presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on January 29, ahead of the Union Budget 2026, which is scheduled to be tabled on February 1.
