Rating agency Icra on Wednesday retained its forecast for India’s GDP growth at 6.2% for 2025-26, citing stable domestic drivers such as a well-distributed monsoon and moderated crude oil prices around $70 per barrel, but flagged escalating downside risks due to geopolitical and financial market uncertainties.In its June macroeconomic update, Icra said early data from the first two months of FY26 suggested mixed trends in activity, with only nine of 17 key non-agricultural indicators showing improvement over the fourth quarter of FY25, according to PTI report.“The early onset of monsoon in May 2025 partly weighed on the performance of the electricity and mining sectors,” the agency noted, while projecting healthy output growth in summer crops and sustained momentum in urban consumption, aided by tax reliefs and lower food inflation.Icra’s forecast trails the Reserve Bank of India’s more optimistic 6.5% projection. However, the rating agency cautioned that elevated global risks—especially tensions in West Asia, volatile global financial markets, and uncertainty around tariff policies—could act as significant headwinds.“The downside risks to the FY2026 GDP growth forecast have risen,” the report said, quoted PTI.Icra also expects inflation to moderate, with the consumer price index (CPI) projected at 3.5% for FY26—well below FY25’s 4.6% and the RBI’s own forecast of 3.7%. It attributed the easing to a favourable monsoon outlook and a likely drop in food prices.On interest rates, Icra said a rate pause in the August 2025 policy meeting was likely but did not rule out a final 25 basis point rate cut in October, depending on the inflation-growth dynamics.The agency estimated that a $10 per barrel increase in crude prices would push up net oil imports by $13–14 billion, expanding the current account deficit (CAD) by 0.3% of GDP. It added that a sustained oil shock could also hit corporate margins and force a downward revision to its GDP growth estimate.