Monsoon Deficit and Global Energy Stress To Slow India’s Growth to 6.6%, Says S&P

New Delhi: Global rating giant S&P Global Ratings on Wednesday said energy stress, sub-par monsoon and slowing global growth will pull down India’s gross domestic product (GDP) growth to 6.6 per cent in the current fiscal. The Indian economy recorded 7.7 per cent growth in the 2025-26 fiscal and 7.1 per cent in 2024-25.

“We project real GDP growth will slow to 6.6 per cent in the fiscal year ending in March 2027, compared with 7.7 per cent in fiscal 2026, amid the energy stress, expectations of a sub-par monsoon, and slowing global growth,” S&P said in its latest report.

S&P's FY27 growth projection is in line with the RBI estimate of 6.6 per cent. The impact of El Nino has weakened monsoon rains, with the rainfall deficit widening to 43 per cent by June 22. To deal with deficient monsoon, the government has drawn up state-wise contingency plans recommending alternative crops suited to deficient rainfall conditions.

India imports 88 per cent of its crude oil needs, and a rise in global prices increases its import bill and stokes inflation. “The region's outlook is shaped by resilient global activity, energy market stress, and an AI-driven tech export boom. The impact of energy stress arising from the West Asia conflict is visible, as the industry faces a substantial rise in input costs and suppliers' delivery time. Also, higher fertiliser prices weigh on food production and raise food prices,” S&P said.

The S&P further said that rising inflation is eroding purchasing power, thus depressing growth. “Sharply higher fertiliser prices may weigh on food production and fuel food prices. “Consumer inflation would be 0.5-0.6 percentage points higher in the third quarter in India, and it will rise to 5.1 per cent in the current fiscal year as manufacturers pass on higher energy costs to consumers, alongside recent increases in prices of petrol, diesel, and cooking gas,” the report said.

India, US Inch Closer to Historic Interim Trade Deal Ahead of July Tariff Deadline

The two-day rounds of ministerial-level negotiations on the proposed first phase of their bilateral trade agreement (BTA) between India and the United States ended on Wednesday, with both sides reviewing progress and discussing ways to finalise an interim pact before a key US tariff deadline next month. However, the high-level trade talks appeared to be closer than ever to finally seal the first phase of the deal.

The multiple rounds of discussions were held on both Tuesday and Wednesday between commerce and industry minister Piyush Goyal and US Trade Representative Jamieson Greer. Both sides are looking at finalising the talks before the expiry of the 10 per cent temporary tariffs imposed by the US on all its trading partners on February 24. The tariffs will expire on July 24.

In an official statement, the commerce ministry said that recognising the growing significance of the India–US economic partnership amid evolving global trade dynamics, both sides reiterated their shared goal of expanding bilateral trade, fostering innovation, and building resilient, trusted supply chains.

“The discussions focused on pathways to conclude an interim agreement as an important milestone towards a comprehensive BTA. The two leaders conducted a comprehensive review of core elements, including enhanced market access, digital trade, supply chain resilience, reduction of non-tariff barriers, and expanded cooperation in strategic sectors,” the ministry said.

As per the ministry, the two sides expressed confidence that ongoing negotiations will further deepen economic ties and strengthen the India and US Comprehensive Global Strategic Partnership. “Both sides reaffirmed their commitment to an agreement that is balanced, commercially meaningful, and delivers tangible benefits for businesses, farmers, workers, and consumers in both countries,” the ministry said.

Soon after the meeting is over, Goyal shares a post on X, saying that he reviewed progress of the ongoing India-US trade discussions and explored avenues to further deepen our economic partnership. “I appreciate Ambassador Greer's leadership and the sustained efforts of both teams in advancing our discussions in a constructive and forward-looking manner,” Goyal said.

Meanwhile, a senior US official also said that the United States and India are ‘very, very close’ to concluding a historic bilateral trade deal that will open the 1.4 billion-strong Indian markets to American goods on reciprocal and mutually beneficial terms. “We're not measuring the relationship by meeting. We’re measuring it by results…,” US deputy assistant secretary of state Bethany Poulos Morrison said in a social media post.

Piyush Goyal to Visit UK to Finalize Implementation of Landmark India-UK CETA

Ahead of the rollout of the India-UK trade agreement in mid-July, commerce minister Piyush Goyal will visit the United Kingdom between June 25 and 27 for talks on issues related to implementation of the comprehensive economic and trade agreement (CETA). The minister is scheduled to ‌meet UK business and trade secretary Peter Kyle to discuss implementation issues, including tariff cuts, regulatory coordination and mechanisms to ease trade and mobility of professionals, the government said on Wednesday.

The visit comes ahead of the entry into force of the landmark India-UK CETA and the companion double contribution convention (DCC) on July 15, 2026. “The bilateral discussions will focus on aligning regulatory roadmaps, streamlining cross-border customs coordination and finalising administrative mechanisms to facilitate the smooth implementation of CETA and the DCC,” the commerce ministry said in an official statement.

“The ministers will review preparedness for the implementation of CETA’s tariff liberalisation commitments, which will provide enhanced market access opportunities for Indian exports in the UK. Discussions will also cover the operational roadmap for the DCC, which is expected to establish a streamlined mechanism to address dual social security contribution requirements for eligible temporary workers, thereby supporting greater mobility of professionals and businesses,” the ministry said.

Goyal’s visit, however, underscores India’s commitment to engaging with global businesses and investors and is expected to contribute to the shared objective of expanding India-UK economic cooperation and advancing the target of achieving $120 billion in bilateral trade by 2030.

As part of the visit, Goyal will participate in a series of government-to-business (G2B) engagements with industry leaders; investors and corporate representatives to further strengthen commercial partnerships between India and the UK. Goyal is also expected to meet senior executives from leading international financial institutions, including JP Morgan, Standard Chartered, Lloyds, Morgan Stanley and Arup, who will participate in discussions on India's industrial competitiveness, investment landscape and integration with global supply chains.

Besides, the minister will address the opening plenary session of the India Global Forum (IGF) and hold standalone interactions with senior executives of leading global companies, including HSBC (Global Trade Solutions) and Rolls-Royce, to discuss strategic investments, industrial collaboration and the expansion of manufacturing partnerships in India.