Showing a resilient economy in the Asia-Pacific region amid global uncertainties, India’s GDP will grow at 6.5 per cent in the fiscal year ending March 31, 2026, S&P Global Ratings said on Tuesday.

This assumes the upcoming monsoon season will be normal and that commodity — especially crude — prices will be soft,” said the global financial institution in its latest quarterly economic update for Asia-Pacific economies.

“Cooling food inflation, the tax benefits announced in the country’s budget for the fiscal year ending March 2026, and lower borrowing costs will support discretionary consumption,” it added.

As tariffs tend to be levied on goods, trade will be more resilient in economies where a substantial share of exports is of services. This is the case for the Philippines and, especially, India.

On rate cuts, S&P Global Ratings projected that that the Reserve Bank of India (RBI) will cut interest rates by another 75 bps-100 bps in the current cycle.

“Easing food inflation and lower crude prices will move headline inflation closer to the central bank target of 4 per cent in the fiscal year ending March 2026 and fiscal policy is contained,” according to the report.

Given the volume of policy measures and external pressures hitting Asia-Pacific, “the robustness of our forecasts underscores the resilience of the regional economies,” it noted.

However, the US tariff hikes on China's exports will weigh on its economy.

“We had incorporated 10 per cent U.S. tariffs in our November baseline, implying an effective U.S. tariff on Chinese exports of about 25 per cent. The additional 10 per cent levies will bring the effective rate to about 35 per cent. That will depress China’s growth via lower exports, investment and other spillover effects,” said the report.

The hit on GDP growth should be most significant for Malaysia (because of semiconductors), Singapore (mainly due to pharmaceutical products), and South Korea (mainly because of automobiles), it added.