Four global agencies — Fitch Ratings, S&P Global Ratings, the Organisation for Economic Co-operation and Development (OECD) and the Asian Development Bank (ADB) — have raised their growth projections for India for the current financial year, citing stronger-than-expected economic activity, resilient consumption and robust investment. The revisions follow India's better-than-expected GDP growth in the first quarter of FY27.
Fitch raised its FY27 growth forecast for India to 6.9% from 6.4%, while S&P Global Ratings increased its estimate to 7% from 6.6%. The OECD raised its projection by 80 basis points to 7.1%, while the ADB expects the Indian economy to grow 7% in FY27, reflecting stronger investment demand and resilient services exports.
Despite the upward revisions, Fitch and S&P expect growth to moderate in the second half of FY27 as the impact of GST rationalisation and income tax cuts fades. Weather-related risks, including below-normal rainfall, and rising inflation could also weigh on economic activity.
Fitch said the Indian economy had demonstrated resilience despite the shock from the US-Iran war and a significant deterioration in terms of trade during the first half of 2026. However, it expects growth to moderate in the remainder of FY27, citing a slower pace of expansion in manufacturing and services, below-normal monsoon rainfall and rising inflation.
Fitch expects growth to remain at 6.5% in FY28 and FY29.
S&P attributed the stronger-than-expected growth in the June quarter to robust industrial activity, healthy consumption, strong goods exports and accelerating government investment.
However, it expects growth to ease in the second half of FY27 as the benefits of GST rationalisation and income tax cuts diminish.
The agency flagged weather-related risks, noting that cumulative rainfall was 15% below normal till September 9, 2026. Agricultural output and food inflation remain key variables to monitor, it said.
The OECD in its Economic Outlook said reduced purchasing power was expected to weaken growth through the second half of the year, before a gradual recovery in 2027.
The OECD projected India's growth to decline from 7.8% in FY26 to 7.1% in FY27 and 6.5% in FY28. It revised down its inflation forecast for FY26 to 5% from 5.2%, citing the expected limited pass-through of higher global energy prices following tax cuts.
The ADB projected India's economy to grow 7% in FY27, supported by resilient consumption, healthy investment and strong services exports, which are expected to offset the impact of higher energy costs and a weaker monsoon. The forecast was higher than its July 2026 projection by 40 bps.
However, the ADB downgraded its FY28 growth forecast to 7.1% from its July projection, citing base effects from faster growth in FY27. It retained its FY28 inflation forecast at 4% and lowered the FY27 projection to 5%.