New Delhi, Dec 2 : Indiaâ??s gross domestic product growth is expected to grow 6.4 per cent in the third quarter and 6.3 per cent in the fourth quarter of fiscal 2026, a report said on Tuesday.

The report from rating agency Brickwork Ratings also said that it revised its fullâ??year real GDP growth forecast to 7.2 per cent from 6.8 per cent due to strong private consumption, robust investment activity, sustained public expenditure, favourable monsoon, trade diversification, and positive effects of GST reforms.

The firm maintained that GST cuts provide partial relief but are insufficient to fully offset tradeâ??related headwinds. Inflation is expected to stay moderate, aided by food stability and easing core pressures, while global commodity volatility remains the key risk, it said.

Further, the exceptionally low readings create a base effect that will mechanically lift headline inflation in Q4 FY26 even if underlying price trends remain benign.

"While domestic demand and reform momentum provide a strong foundation, external risksâ??including tariff actions, global demand softness, and energy import dependenceâ??require continued vigilance," said Rajeev Sharan, Head â?? Criteria, Model Development & Research, Brickwork Ratings.

Indiaâ??s robust sectoral momentum is bolstering macroeconomic resilience and strengthening fiscal revenues, though sectoral imbalances underscore the need for broader diversification to sustain investor confidence, he said.

While global headwinds -- especially weak demand in Europe and China and the US tariff -- may weigh on exports, domestic resilience driven by government capex and digital manufacturing should sustain momentum.

The outlook for H2 FY2026 remains positive, supported by infrastructure spending, manufacturing incentives, and a lift in consumer spending in Q3 due to the festive season in India, the firm anticipated.

Recovery in mining and electricity towards the end of 2025 is expected to support IIP growth, it said.

/IANS