India's economy to grow at 7.2% in FY27: Economic Survey
What's the story
India's economy is projected to grow between 6.8% and 7.2% in the fiscal year 2026-27 (FY27), according to the Economic Survey tabled by Finance Minister Nirmala Sitharaman on Thursday. The estimate is higher than the International Monetary Fund (IMF)'s forecast of 6.4% and World Bank's projection of 6.5%. The survey emphasizes domestic drivers as key contributors to this growth outlook, amid global uncertainties such as geopolitical tensions and uneven demand patterns across countries.
Growth factors
Resilience amid global challenges
The Economic Survey highlights India's resilience in the face of a volatile global environment. It notes that geopolitical tensions, tighter financial conditions, and uneven demand patterns across countries have not deterred India's economic growth. The survey also emphasizes domestic drivers as key contributors to this growth outlook. This is particularly relevant given the current global economic landscape marked by uncertainty and volatility.
Economic performance
India's economic growth surpasses RBI's expectations
The survey projects India's economy to grow at a better-than-expected 7.4% in FY26, beating the Reserve Bank of India (RBI)'s estimate of 7.3%. This is also an improvement over last year's growth rate of 6.5%. The projection is backed by rising investment and a manufacturing surge, as per government data released earlier this year. On a calendar year basis, the Indian economy is projected to grow at 6.3% in 2026 and 6.5% in 2027.
Growth acceleration
GDP growth accelerates in FY26's 2nd quarter
India's economic momentum picked up pace in the second quarter of FY26, with GDP growth accelerating to a six-quarter high of 8.2%. This is an improvement over the 7.8% expansion recorded in the April-June quarter. The first advance estimates show that India's economy will cross the $4-trillion mark in FY26, with nominal growth projected at 8%.
Future outlook
India's economic growth projections amid global uncertainties
The World Bank and IMF have projected India to remain the world's fastest-growing major economy, albeit at lower rates of 6.5% and 6.6%, respectively. The Indian economy expanded by 8% in the first half of the current fiscal year, with a projected growth rate of around 6.9% for the second half based on first advance estimates. Despite these positive indicators, many economists are skeptical about sustaining this momentum amid ongoing trade deal uncertainties with the US.