New Delhi, May 22 -- Morgan Stanley, a global financial services firm, on Wednesday modestly upgraded its forecast for the Indian economy to 6.2 per cent year-on-year for financial year 2026, up from 6.1 per cent and 6.5 per cent for FY 2027, up from 6.3 per cent.

"We upgrade our growth forecasts modestly to 6.2% YoY (vs. 6.1%) for F2026 and 6.5% YoY (vs. 6.3%) for F2027 in view of the de-escalation of US-China trade tensions, which improves the outlook for external demand at the margin," said the report.

The financial services firm cited the internal economic forces behind the upward revision of India's GDP. It says that domestic demand will remain the primary engine of growth, especially at a time when global uncertainties persist.

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