New Delhi, March 6 -- India's economy is set to grow at a steady 6.5% in fiscal 2026, driven by strong domestic demand, despite global headwinds including geopolitical uncertainties and US-led trade actions, Crisil forecast on Thursday.

According to its latest India Outlook report (FY26), Crisil said the projection assumes a normal monsoon and stable commodity prices with key drivers including cooling food inflation, tax benefits announced in the budget and lower borrowing costs, which are expected to boost consumption.

While growth is stabilizing at pre-pandemic levels as fiscal support normalizes and the high-base effect fades, high-frequency Purchasing Managers Index (PMI) data shows India continues to lead among major economies, the...