India GDP Growth

Stronger industrial output, energy consumption, port traffic, GST collections and auto sales support the growth outlook, while inflation, energy price volatility and geopolitical tensions pose risks

The US-Israeli-led war with Iran has so far had limited impact on ​economic growth, but it has pushed up inflation mainly through higher energy costs

Sustaining economic growth of 7 per cent or more will require stronger private investment, labour-intensive manufacturing, better human capital and deeper integration into global value chains, former RBI Governor D Subbarao has said. Subbarao also said that the challenge is not merely to grow fast, but to make growth productive, employment-intensive and resilient. "India's 7.8 per cent growth in the first quarter suggests that the economy is more resilient than many expected...I am optimistic about India's medium-term prospects, but not complacent," he told PTI. Recently, the World Bank raised India's GDP growth forecast for the current fiscal year to 7.1 per cent, up 0.5 percentage points from its April projections, supported by robust domestic demand and strong exports, despite global headwinds. "Sustaining growth of 7 per cent or more will require stronger private investment, labour-intensive manufacturing, better human capital and deeper integration into global value chains..

The Indian economy is expected to grow by 7.1-7.3 per cent in the current fiscal, with a sustained revival in private investment providing an additional source of demand, Deloitte India said on Friday. However, geopolitical tensions, volatile energy prices and trade disruptions pose risks to the growth outlook, it added. Deloitte India Economist Rumki Majumdar said over the past decade, India's growth has rested on resilient household spending and sustained investment push in public infrastructure. Businesses now have better connectivity, healthier balance sheets, and higher capacity utilisation, which strengthens the case for expansion. "The question is whether these conditions will encourage private investment to play a larger role in boosting growth in the coming years. Recent indicators offer grounds for optimism. Gross fixed capital formation grew by 11.9 per cent in the first quarter of FY 2026-27, its fastest expansion in four years," Majumdar said. Deloitte Economic Outlook

Cites resilient demand, but warns of risks from war and AI investments

The surge in US tariffs since President Donald Trump returned to the White House in January 2025 is redrawing global trade links

Marking 25 years as a head of government, Narendra Modi sets out six goals for India and vows to continue serving the country until it becomes a developed nation by 2047.

There is a meaningful risk that inflation and input costs become bigger concerns in Q2 than they were in Q1, said Dhananjay Sinha of Systematix Group.

'Don't take growth for granted amid global shocks'

India must work on ensuring that the economy is more competition-friendly rather than business-friendly, says the report

Beyond February 2027, Nomura expects the probability of further rate increases to diminish, citing the potential for a slowdown in consumption.

Economists said revisions to GDP growth projections by these institutions were expected as the print for the June quarter was better than expected

The Organisation for Economic Co-operation and Development (OECD) on Wednesday raised India's GDP growth projection for current fiscal by 80 basis points to 7.1 per cent citing resilient domestic demand and government policies that cushioned households and firms from the impact of higher energy prices. In June, the Paris-based inter-governmental body had projected the Indian economy to grow at 6.3 per cent in 2026-27. OECD said structural policy reforms that enhance the ability of economies to cope with supply side disruptions are also a key priority for governments at the current juncture. With regard to India, OECD in its Interim Economic Outlook said growth in several G20 emerging market economies, such as India, was underpinned by resilient domestic demand and government policies that cushioned households and firms from the impact of higher energy prices. "Despite recent strong momentum, reduced purchasing power is also expected to weaken growth in India through the second half

ADB raised India's FY27 growth forecast to 7 per cent from 6.6 per cent on strong investment and services exports, while cutting its FY28 estimate to 7.1 per cent from 7.3 per cent

The Asian Development Bank (ADB) on Wednesday raised its forecast for India's economic growth in the current fiscal to 7 per cent, up from 6.6 per cent projected in July, citing stronger-than-expected economic performance in the first quarter despite supply-side disruptions caused by West Asia crisis. In its Asian Development Outlook (ADO) September 2026, the multilateral lender said, "The revision reflects India's stronger-than-expected economic performance, with GDP expanding by 7.8 per cent year-on-year in the first quarter of FY2026 (2026-27), supported by robust investment demand, resilient consumption, and solid growth in manufacturing and service sectors." The economy has also benefited from lower-than-expected supply disruptions, sustained capital inflows, and limited pass-through of higher input cost to consumer prices, which helped cushion the impact of the conflict in the Middle East, the report said. The ADB's latest projection marks an upward revision of 0.4 percentage

S&P Global Ratings on Wednesday raised India's GDP growth projections for the current fiscal to 7 per cent, citing robust economic activity and forecasting that the RBI could hike interest rates by 25 basis points in FY27. In its Economic Activity for Asia Pacific report, S&P estimates consumer inflation to average 5.1 per cent in FY27. The Indian economy grew higher than expected at 7.8 per cent in the June quarter. S&P said factors like robust industrial activity, healthy consumption, strong goods exports, and accelerating government investment have driven the growth. "We have consequently upgraded our GDP growth forecast for the current fiscal year, ending March 31, 2027, to 7 per cent, from 6.6 per cent previously," S&P said, adding growth could ease in the second half of the fiscal year as the tailwinds from General Sales Tax rationalisation and income tax cuts diminish. Weather-related risks warrant close monitoring. Cumulative rainfall was 15 per cent below ...

India's economy is likely to lose some momentum in the second half of fiscal 2026-27 as tighter financial conditions, elevated energy prices and unfavourable base effects weigh on activity, while broadening inflation pressures could keep monetary policy focused on price stability, DBS Bank economist Radhika Rao said. India started FY27 (April 2026 to March 2027 fiscal year) on a strong footing, with the economy growing 7.8 per cent year-on-year in the first quarter, supported by resilient domestic demand, consumption, public capital expenditure and manufacturing, Rao, Senior Economist and Executive Director at DBS Bank, said in an assessment of the macroeconomic outlook. DBS expects full-year FY27 growth to average 7.3 per cent, compared with a revised 7.8 per cent for FY26, she said. High-frequency indicators including goods and services tax collections, e-way bills, electricity demand and digital payments have remained resilient, suggesting domestic activity continues to hold up,

The agency said elevated energy prices and ‌El Niño-related food price pressures pose risks to inflation, consumption and growth

Despite govt's efforts, it remains difficult to assess whether the problems with the earlier GDP series have been adequately addressed

India's economy started FY27 on a strong footing, but questions emerged over the 7.8 per cent GDP growth in Q1 and the methodology behind it