India set to grow at 7.2% this fiscal on rising consumption: ADB

India's growth is set to pick up and is expected to grow at 7.2 per cent in the current fiscal on strengthening consumption, Asian Development Bank said in its flagship report released Wednesday.

"Growth slowed from 7.2 per cent in fiscal 2017 to 7 per cent in 2018, with weaker agricultural output and consumption growth curtailed by higher global oil prices and lower government expenditure," according to the Asian Development Outlook (ADO) 2019.

It is expected to rebound to 7.2 per cent in 2019 and 7.3 per cent in 2020 as policy rates are cut and farmers receive income support, bolstering domestic demand, the report stated adding that sub-region wise, southeast Asia will sustain growth at close to 5 per cent this year and the next.

Strengthening domestic demand will offset weaker export growth. Strong consumption, spurred by rising incomes, subdued inflation, and robust remittances, should boost economic activity in the subregion, it said.

Export demand, on the other hand, is likely to soften in 2019 in line with the weaker global environment and a muted forecast for semiconductor exports, before picking up slightly in 2020.

"Growth, overall, remains solid with domestic consumption strong or expanding in most economies around the region. This is softening the impact of slowing exports, said ADB Chief Economist Yasuyuki Sawada.

Uncertainty clouding the outlook remains elevated, Sawada added.