The Reserve Bank of India (RBI) has projected India’s real GDP growth at 7.6% for FY26 under a revised GDP series, underscoring the economy’s resilience despite a challenging global environment. The outlook is supported by robust domestic demand, steady services sector performance, and continued expansion in manufacturing.
For FY27, growth is expected to moderate to 6.9%, reflecting mounting global uncertainties and rising cost pressures. Announcing the projections after the Monetary Policy Committee (MPC) meeting, RBI Governor Sanjay Malhotrahighlighted that geopolitical tensions and volatile global conditions remain key downside risks to growth.
The central bank has slightly adjusted its quarterly growth estimates for FY27. GDP growth for the first quarter has been revised down to 6.8% from 6.9%, while the second quarter projection has been reduced to 6.7% from 7%. These revisions reflect concerns over global headwinds, particularly the impact of rising energy prices.
“Global growth faces increasing downside risks as the sharp rise in energy prices has stoked inflation concerns,” the Governor noted.
India’s GDP growth stood at 7.8% in the December quarter of FY26, compared to 8.4% in the previous quarter, indicating a gradual normalization in growth momentum.
The RBI expects private sector investment to gain traction, supported by high capacity utilization levels. Additionally, the near-term outlook for food prices remains stable, providing some relief on the inflation front.
Consumer price inflation is projected at 4.6% for FY27, with quarterly estimates at 4% in Q1, 4.4% in Q2, 5.2% in Q3, and 4.7% in Q4.
The central bank also reaffirmed its commitment to maintaining adequate liquidity in the banking system to support productive sectors. India’s foreign exchange reserves stood at $697.1 billion as of April 3, while improving net foreign direct investment (FDI) signals continued investor confidence, particularly in greenfield projects.
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